The cryptocurrency market is feeling the heat of bearish momentum. Ethereum has had a tough week, and Justin Sun seems to be at the center of it. The Tron founder has been selling off his holdings of ETH, causing ripples in the market. In the past week, he sold ETH worth $143 million, which is about half of his holdings. His actions have led to a significant drop in Ethereum's price. The community has many questions about him. Is he playing a game that others are unaware of? There are more questions behind the single question of why Ethereum is dropping. Let's explore these factors.
Justin Sun: Selling and staking.
According to Spot on chain data, since November 10, he has deposited 108,919 ETH, worth about $400 million, to HTX (formerly Huobi). Most of these deposits occurred when the price was near its peak, averaging $3,674 per ETH.
Source: Spot on chain
Blockchain experts have noticed that Sun is also canceling a large amount of ETH staking. Specifically, 42,904 ETH worth $139 million was recently unstaked from Lido Finance. There are suspicions that he might also transfer these funds to HTX. Given the high level of activity, it’s no surprise that Ethereum's price has been struggling.
Ethereum's price is under pressure.
Ethereum is currently trading at $3,304. This is a 4,000% drop since it was recently rejected at $17. In just the past 24 hours, it has dropped another 2.19%. Trading volume has also decreased, down 8.57%.
Source: Coinglass
Market sentiment also looks poor. Most traders appear to be bearish. Futures data shows that 54% of open interests are short positions, with a long-short ratio of 0.8495. However, there is still a glimmer of hope—78% of Ethereum holders are in profit at the current price.
From a technical analysis perspective, Ethereum is nearing a key support level at $3,260. If it falls below this level, the price could drop to $3,000, while the 200-day moving average might provide some stability. Nevertheless, with the RSI at 39.28 (close to the oversold region) and the ADX showing bearish momentum, the outlook isn't optimistic.
What's next?
The biggest question is whether Ethereum can hold above $3,260. If not, we might see it fall to $2,800, especially if whales like Justin Sun continue to sell. Some analysts believe Ethereum is still in the 'safe zone.' But others warn that low trading volume over the weekend and stock market uncertainty could bring greater volatility. This may have already quelled your curiosity about why Ethereum is dropping. Investors should remain cautious. Price fluctuations in Ethereum are not new, but the market's reaction to Justin Sun's actions has got everyone paying closer attention.