Ethereum (ETH) has been on the radar of many investors hoping for a push toward $4,000 by the end of 2024. After showing impressive bullish momentum in November, the cryptocurrency now finds itself facing signs that a pullback could be in store. While Ethereum’s spot flows have remained positive, whale activity and ETF inflows are suggesting that the bullish momentum may be losing steam, potentially signaling a retracement.

Ethereum’s Whale Activity and Sell Pressure

Ethereum has faced growing sell pressure recently, driven primarily by large holders, often referred to as “whales.” Data from IntoTheBlock shows that whale outflows peaked at 647,220 ETH on December 3, indicating that large holders are taking profits and reducing their positions. Although whale inflows also saw a rise, they peaked at 582,710 ETH over the same period. The net difference between these inflows and outflows signals that sell pressure from whales is outpacing the buying demand.

This shift in whale behavior is notable, as Ethereum’s price has been under pressure, especially with a large portion of the market’s bullish momentum seemingly fading. Whales typically influence market sentiment, and their actions may point to a cooling of the broader bullish outlook that had carried Ethereum’s price higher throughout November.

Ethereum ETF Inflows Show Decline

Ethereum’s growth was also supported by strong inflows into Ethereum exchange-traded funds (ETFs), but even this aspect is showing signs of slowing down. On December 3, Ethereum ETF inflows were positive, amounting to $132.6 million, a notable improvement from the $24.2 million observed the previous day. However, this marks a steep decline compared to the $332.9 million Ethereum ETFs saw just a few days earlier, on Friday last week.

This downturn in ETF inflows may suggest that institutional investors, who have been a driving force in Ethereum’s rally, are pulling back or hesitating in their investments. The decline in ETF demand adds to the overall picture of weakening bullish sentiment in the market.

Spot Flows Paint a Contrasting Picture

Despite the bearish signals from whale activity and ETFs, Ethereum’s spot flows have painted a more optimistic picture. In the last 24 hours, spot inflows into Ethereum reached a significant $285 million, with $252.69 million seen on November 3. These figures reflect sustained investor interest, which has helped Ethereum maintain its position and recover some of the losses from earlier in the week.

Spot flows track the demand for Ethereum in the open market and typically reflect retail investor sentiment. This increase in spot flows is encouraging, as it suggests that, despite the profit-taking by whales, regular investors continue to show confidence in Ethereum, contributing to the cryptocurrency’s recent price recovery. As of writing, Ethereum is trading at $3,731, having bounced back from initial sell-off pressures seen earlier this week.

Technical Analysis: Bearish Divergence and Retracement Expectations

While spot flows indicate some bullish activity, technical indicators suggest a possible retracement. Ethereum’s price action has been forming a bearish divergence with the Relative Strength Index (RSI), a classic signal that a pullback could be imminent. A bearish divergence occurs when the price of an asset rises while the RSI, which measures the strength of a price move, fails to follow suit, indicating weakening momentum.

Given the current market conditions, it is expected that Ethereum might experience a retracement from its current levels. If a pullback happens, ETH could dip to the $3,050 level, which is seen as a key support point. A retracement to this level would likely test whether Ethereum’s current bullish trend is sustainable or if further profit-taking from whales could lead to a deeper decline.

What’s Next for Ethereum?

Ethereum’s future remains uncertain as it faces mixed signals from different segments of the market. On one hand, strong spot inflows and recovering price action suggest that Ethereum’s momentum might not be completely lost. On the other hand, the growing sell pressure from large holders, declining ETF inflows, and bearish divergence in technical indicators indicate that a pullback could be in the cards.

For Ethereum to maintain its upward trajectory, it will need to hold support levels around $3,200 and above. A failure to maintain these levels could open the door for further retracement. Conversely, a stabilization above $3,700 could signal that the market is ready for the next leg up, pushing Ethereum closer to its $4,000 target.

Conclusion: A Crossroad for Ethereum

Ethereum’s dream of hitting $4,000 by the end of 2024 is facing challenges, with signs of profit-taking by whales and a decline in ETF demand. However, the positive spot flows and price recovery over the past few days show that Ethereum is not entirely out of bullish steam yet. As the market waits to see if the pullback continues or if demand will pick up again, Ethereum investors must remain vigilant about key support levels and watch for any signs of further price weakness.

The coming days will likely be crucial in determining Ethereum’s short-term price movement, and whether or not it can regain enough momentum to push toward its $4,000 goal before the year ends.