Ethereums (ETH) underperformance in the last four months has raised speculation about the asset’s overall potential in this bull cycle. Investors are wondering which would be the right move—selling their ETH for other cryptocurrencies to avoid further losses or loading up on the asset in anticipation of future gains.

On-chain analyst Ali Martinez has offered insights into ether’s price trajectory, evaluating metrics that could paint a bullish or bearish outlook for the second-largest cryptocurrency.

A Good Time to Buy ETH?

According to Martinez’s analysis, ether’s 57% decline from $4,100 to $1,750 between December and mid-March drove investor sentiment into fear territory. This triggered significant selling activity, even among whales – this is evident in the number of addresses holding more than 10,000 ETH plummeting from 999 to 919 between mid-February and early March.

Transaction activity from Ethereum whales further intensified the selling with at least 130,000 ETH leaving wallets belonging to these large investors in the week ending March 17. United States spot Ethereum exchange-traded funds (ETFs) have also recorded outflows totaling $760 million in the past month.

Additionally, traders moved more than 100,000 ETH to crypto exchanges between March 11 and 13, contributing to the selling pressure.

Technical Indicators

From a technical perspective, ether’s three-day chart shows an ascending triangle pointing toward a possible plunge to $1,000. Another daily chart parallel channel break suggested the cryptocurrency could fall toward $1,250.

Furthermore, ETH pricing bands have highlighted $1,440 as a critical downside target, although the coin could witness a rebound if it holds at this support level. Martinez has identified $1,887 as the most important support level for ETH. At this cost-basis distribution level, investors have accumulated 1.63 million ETH.

However, if ETH fails to hold the $1,887 support level, then the plunge to lower targets of $1,440, $1,250, and even $1,000 would most likely happen. There is also significant resistance at $2,250 and $2,610; Martinez says ETH breaking above this area would invalidate the bearish outlook.

The crypto analyst insisted that the high selling activity and technical indicators pointed to further downside risk for ETH. However, it appears the tides are beginning to change. Recent data revealed that ETH whales accumulated 470,000 ETH last week, while traders have withdrawn 1.20 million ETH from exchanges in the last 48 days.

With a substantial amount of ETH exiting exchanges and whales accumulating the asset, there could be upward pressure on the price of the cryptocurrency. Ether has already been up almost 10% in the past week, hovering above $2,090 at the time of writing.