Over the past two weeks, the broader crypto market has shown lackluster performance, keeping Ethereum within a tight trading range. 

Since July 21, the altcoin has repeatedly tested resistance near $3,859 while finding support at $3,524, struggling to break clear of this zone. With momentum fading, key on-chain metrics now suggest that ETH may face an extended period of sideways consolidation or a potential price breakdown.

Ethereum’s Big Players Step Back

According to CryptoQuant’s data, ETH’s falling estimated leverage ratio (ELR) across all cryptocurrency exchanges reflects waning investor confidence and a declining appetite for risk among its futures traders. Per the data provider, ETH’s ELR now sits at a weekly low of 0.76.

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The ELR metric measures the average amount of leverage traders use to execute trades on an asset on a cryptocurrency exchange. It is calculated by dividing the asset’s open interest by the exchange’s reserve for that currency. 

ETH’s declining ELR signals a market environment where traders avoid high-leverage bets. Its investors are growing cautious about the coin’s short-term prospects and are not taking high-leverage positions that could amplify potential losses.

If this pullback in speculative activity continues, it will reduce the likelihood of a near-term breakout and increase the chances of ETH remaining range-bound.

Furthermore, ETH whales have also reduced their accumulation over the past week, possibly to lock in profit.  According to IntoTheBlock’s data, the coin’s large holders’ netflow is down 224% in the last seven days, showing the retreat from ETH’s key holders.

Large holders are whale addresses controlling over 0.1% of an asset’s circulating supply. Their netflow tracks the difference between the coins they buy and the amount they sell over a specific period.

When an asset’s large holders’ netflow increases, whales are buying more of its coins/tokens on exchanges, potentially in anticipation of a price rally. 

On the other hand, as with ETH, when it declines, it signals reduced activity and profit-taking among these key investors.

ETH Bulls and Bears Face Off: Will $3,524 Hold or Break?

The metrics above highlight waning confidence in ETH’s near-term price gains and a reluctance among its key holders to commit significant capital to the market right now. If this persists, bearish pressure on the coin will increase, potentially triggering a breach of support at $3,524.

If this happens, the coin could extend its dip to $3,067.However, if the bulls regain dominance, they could drive a break above the resistance at $3,859. If successful, ETH’s price could climb above $4,000.