Ethereum May Test Critical Support After $3,100 Breakout as Accumulation Hits Record High

TLDR:

• Ethereum broke the $3,100 resistance but now may retest the $3,020-$3,050 support zone for confirmation.
• December saw record Ethereum inflows into accumulation addresses despite continued elevated selling pressure.
• Growing validator staking activity removes ETH supply from circulation, creating tightening dynamics.
• Next, resistance zones at $3,160-$3,240 and $3,320-$3,400 will determine the strength of bullish momentum.

Ethereum broke above the $3,100 resistance level yesterday before entering a slight retracement phase. The pullback represents a normal market reaction as traders lock in profits following the breakout. 

Market analysts now focus on the $3,020 to $3,050 support zone as a critical test. Meanwhile, on-chain data reveals record accumulation and growing staking activity despite ongoing selling pressure. These dynamics suggest supply is tightening while price action remains range-bound.

Price Action Points to Critical Support Test

Crypto analyst Ted Pillows noted on social media that Ethereum could retest the $3,020 to $3,050 zone in the near term. 

This area now serves as a key support level following the recent breakout. A successful hold at this range would likely trigger the next upward movement.

The immediate resistance sits between $3,160 and $3,240, where some selling pressure may emerge. Beyond that level, a stronger resistance zone exists between $3,320 and $3,400. 

These thresholds will determine whether the current bullish momentum can sustain itself through the short term.

However, failure to maintain support above $3,020 would shift focus to lower levels. The next significant support zone lies between $2,780 and $2,820. 

Below that, the $2,550 to $2,600 range has historically attracted strong buying interest during previous corrections.

Accumulation and Staking Activity Signal Supply Tightening

Data from FXStreet shows Ethereum experienced record inflows into accumulation addresses during December. 

CryptosRus highlighted this development, noting that elevated selling pressure did not prevent this accumulation trend. The pattern suggests long-term holders are building positions despite short-term price volatility.

Staking activity continues to remove supply from active circulation. More tokens are moving into validator staking arrangements, which lock them up for extended periods. 

This behavior differs from speculative trading patterns and represents capital committing to network participation for yield generation.

The combination of accumulation and staking creates a supply squeeze dynamic. Tokens moving into wallets that historically hold rather than trade reduces available supply. 

At the same time, staking locks remove tokens from circulation entirely. While price has remained relatively flat, these structural changes are occurring beneath the surface. The pattern typically precedes supply-driven price movements, though timing remains uncertain. 

Market participants continue monitoring both technical levels and on-chain metrics for confirmation of the next directional move.

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