Ethereum faces rising selling pressure: will ETH drop below $2,200?

Ethereum ETH is experiencing heightened selling pressure, particularly in the spot markets, after recent developments in US-Iran peace talks have led to increased volatility. 

Additionally, with oil prices surging, ETH has been unable to recover the crucial $2,300 level as of Thursday, signaling potential further downside. 

Rising exchange reserves signal intensified selling pressure 

Over the past week, Ethereum's exchange reserves have been on the rise, climbing by 623K ETH from May 5 to 13. 

This increase in exchange reserves suggests that there is a growing amount of ETH being transferred to centralized exchanges for potential sale, indicating increased selling pressure. 

The distribution trend is largely driven by whales, particularly those holding between 10K and 100K ETH, who have reduced their collective balance by 390K ETH since May 7. 

This marks the largest weekly distribution by this cohort since late March. Meanwhile, smaller retail investors holding between 100-1K ETH have also continued their selling activity, offloading 110K ETH in the past week. 

However, wallets holding 1K-10K ETH have paused their distributions, increasing their holdings by 67K ETH during the same period. 

Similarly, Ethereum exchange-traded funds (ETFs) have also experienced a rise in outflows, with $130.6 million in net outflows recorded over the past two days, according to CoinGlass ETF data. 

On the derivatives side, short positions have dominated Ethereum's futures market recently. The 30-day moving average of ETH’s Net Taker Volume has turned negative for the first time since early March, signaling a shift towards bearish sentiment in ETH futures. 

This metric compares the volume of market orders used to buy ETH perpetual contracts, highlighting the growing strength of short positions. 

Despite the growing dominance of short positions, long traders are starting to return. Ethereum's futures open interest has surged to a record high of 15.5 million ETH, indicating that traders are re-entering the market on the dip. 

Additionally, ETH's funding rates have experienced their longest positive streak since January, suggesting renewed interest from long traders. 

Ethereum price Forecast: Bulls set to defend the $2,211 support

The ETH/USD 4-hour chart is bearish as Ethereum has lost nearly 2% of its value in the last 24 hours. 

On the 4-hour chart, the 50-day EMA at $2,273 act as the first major resistance level. The 20-day EMA near $2,307 and the 100-day EMA around $2,352 form a dense overhead resistance zone, limiting recovery attempts. 

The Relative Strength Index (RSI) has dropped to around 42, while the Stochastic indicator is deeply oversold at 12. 

These signals point to fading momentum, with the broader trend leaning toward further downside while the price remains under the clustered EMA resistance levels. 

If the bearish trend persists, initial support is seen at $2,211, followed by a stronger floor at $2,107. 

An extended selling pressure would see further demand levels appear at $1,909 and $1,741, with deeper support zones at $1,524 and $1,404. 

However, Ethereum bulls need to reclaim the 50-day and 20-day EMAs to ease immediate selling pressure. 

A daily candle break above the 100-day EMA and the horizontal resistance near $2,388 could set the stage for a test of the next major resistance level at $2,746.