Ethereum ($ETH ), the second-largest cryptocurrency by market cap, is under significant selling pressure after a sharp 12% decline over two days. With a bearish rounded top pattern forming and short-term holders offloading their assets, $ETH faces the risk of falling to the $3,000 range. However, whale activity and historical buy zones offer a glimmer of hope. Here’s an in-depth look at Ethereum’s current market dynamics and what lies ahead.
📉 Market Overview: Short-Term Holders Sell Amid Market Panic
Price Drop: $ETH fell below the $3,300 mark, dropping by 4% on Wednesday as short-term investors liquidated their holdings.
Sell-Off Volume: Approximately 120,000 ETH worth $400 million flooded exchanges after Tuesday’s market crash, signaling panic among small-scale whales and retail investors.
Losses Booked: Network Realized Profit/Loss data revealed over $50 million in losses booked by short-term traders during the sell-off.
🐋 Whale Accumulation: Big Players Buy the Dip
Despite the selling frenzy, Ethereum’s major whales (holders with 10K–100K ETH) accumulated 210,000 ETH in just three days. This suggests that long-term investors view the current market correction as a buying opportunity.
Whale Activity: The strong accumulation by large whales contrasts sharply with the selling by smaller holders, highlighting confidence in ETH’s long-term potential.
Dormant Circulation Metric: Dormant circulation indicates a decline in coin movement, suggesting that long-term holders are holding firm despite short-term volatility.
📊 Futures Market and ETF Outflows
Futures Liquidations: Ethereum led the futures market liquidations, with approximately $130 million in long liquidations recorded in 24 hours. The largest single liquidation order totaled $17.74 million for the ETH/USDT pair.
ETF Outflows: Ethereum-focused ETFs saw significant outflows, with $86.8 million worth of ETH holdings sold by investors. This reflects reduced institutional interest during the recent downturn.
🔮 Price Prediction: Rounded Top Pattern Signals Further Decline
Ethereum’s technical indicators suggest a bearish trend in the short term:
1. Rounded Top Formation: A rounded top pattern formed after ETH’s 10% decline, signaling further downside potential.
2. Key Levels to Watch:
Immediate Resistance: $3,216
Support Zone: $3,110, projected as the next target based on the rounded top’s height.
3. Bearish Scenario: Failure to hold $3,216 could lead to a dip to $3,110 or lower.
4. Bullish Reversal Potential: If ETH reclaims the $3,300 level and breaks above $3,550, it could invalidate the bearish pattern and move higher.
💡 Key Insights for Investors
Buy Zone: Around $3,019–$3,358, where approximately 10 million ETH has been accumulated historically, could serve as a strong support zone.
Resistance Levels: ETH faces strong resistance at $3,550. Overcoming this barrier is crucial for a sustained recovery.
Long-Term Perspective: Long-term holders remain unfazed by the recent dip, reflecting confidence in Ethereum’s fundamental value.
📌 Conclusion
Ethereum’s price action remains under pressure, with short-term holders exiting the market and large whales stepping in to accumulate. While bearish patterns point to potential declines, historical support levels and whale activity could limit the downside. Traders should closely monitor the $3,110–$3,216 range for signs of a reversal or further breakdown.
Stay vigilant, practice disciplined risk management, and keep an eye on key resistance levels for potential recovery. Ethereum’s long-term fundamentals remain strong despite short-term volatility.
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