Ethereum (ETH) has been underperforming against other top altcoins such as Solana. Despite the largest altcoin getting recognition from Wall Street through exchange-traded funds (ETFs), it has failed to register substantial gains.
For instance, in the past year, ETH has registered a 52% price gain. On the other hand, Ethereum’s top rival, Solana, has seen its price jump by over 600%.
This lack of action by Ethereum appears to be dampening the confidence of whales or large Ethereum investors.
Ethereum Whales Continue to Sell
The Ethereum Foundation has recently become one of the largest ETH sellers. Last week, the organization sent 35,000 ETH, valued at $94 million, to the Kraken exchange.
The Ethereum Foundation has been selling ETH over the years. These sales have often been associated with volatile prices. As such, the recent dump was seen by some traders as a sign that the ETH could have topped or bottomed.
The Ethereum Foundation famously sold the top in both May and November 2021.But in 2020, they sold 100K ETH, right before ETH pumped 6x.Last night they sent another 35K ETH to Kraken, worth $95M.Did they get it right this time? pic.twitter.com/bYLOyv8mGQ
— Arkham (@ArkhamIntel) August 24, 2024
Another diamond hand whale recently deposited 25K ETH, valued at nearly $74M, to exchanges.
Data from Santiment shows that since early July, the number of addresses holding between 10,000 and 100,000 ETH has significantly dropped.
(Source: Santiment)
Whale accumulation is often good for price because it can support a significant gain. These holders tend to drive demand and reduce supply through their large holdings. Therefore, the selling activity has caused a market imbalance.
Spot Ethereum ETFs further illustrate the weakening demand for ETH. These products have posted a steady streak of outflows since August 15.
Inflows to the BlackRock Ethereum ETF have also dried up significantly despite the Wall Street giant expanding the product’s reach to Brazil.
According to local reports, the BlackRock Ethereum ETF launched on the Brazilian Stock Exchange on August 28.
ETH Price Analysis
ETH was trading at $2,496 at the time of writing after a more than 4% decline in 24 hours.
Despite the waning buying pressure, Ethereum is still showing some bullish signals. As ZyCrypto reported, the ETH held on exchanges has dropped to a record low, hinting at a possible price explosion.
The Relative Strength Index clearly shows sellers have hindered Ethereum’s price gains. The RSI has entered the oversold region several times over the past week and is currently pointing south, an indication that bears are in charge of the price action.
If ETH fails to hold a crucial support level at $2,490, it risks a steeper downtrend to the $2,300 level. On the other hand, if buyers come back into the market, a rally to $2,800 is likely.
