The recent selloff by Ethereum whales has sparked concerns that the price of ETH may crash under the critical level of $2,800. This alarming trend comes amid a broader decline in the crypto market, which has seen Ethereum drop more than 11% within a single day. As the price dwindles below the essential support of $3,500, many investors are left wondering about the potential for a further plunge.
Recent data highlights that these whales, or large holders of Ethereum, have drained a staggering $292 million in ETH to crypto exchange Binance over the past two days. In a concerning move, these huge transactions have created an atmosphere of panic, raising questions about the stability of ETH. With concerns of forced liquidations hanging over the market, analysts are keenly observing the situation for clues about the future price trajectory.
Among the significant transactions, one particular whale transferred 22,746 ETH, valued at $77.7 million, to Binance, indicating a desperate need to repay debts on platforms like Aave and Spark. In just two days, this same investor moved a total of 31,968 ETH into the exchange, solidifying fears that these selloffs could trigger a domino effect, leading other investors to follow suit and sell off their holdings as well.
Adding to the bearish sentiment, the Ethereum Foundation also added to the concerns by selling off 100 ETH just before the price decline, demonstrating strategic timing at what appeared to be market peaks. The foundation has executed a total of 32 trades in the past year, offloading 4,466 ETH worth approximately $12.6 million, thus reinforcing the prevailing sense of pessimism among investors regarding ETH’s immediate future.
Meanwhile, even spot Ethereum ETFs have not been spared, experiencing $60 million in outflows recently, with Grayscale’s ETHE contributing significantly to this wave of selling. The combination of these factors has led many market analysts to maintain a bearish outlook, with predictions indicating that ETH could plunge to $2,800 for re-accumulation before potentially bouncing back.
Prominent crypto analyst Caleb Franzen has described an inverse head-and-shoulders pattern, predicting a slight downward move to the $3,000 level, before a rebound. This sentiment resonates with many market observers, with Franzen remarking that the recent price rejection at the year’s highest point signals a need for investors to brace themselves for further volatility.
Despite these challenges, there are still rays of hope for ETH enthusiasts. The latest data from Deribit highlights a total of 173,000 ETH options that expired recently, carrying a notional value of $590 million. Interestingly, the options data shows a Put/Call ratio of 0.5, which suggests bullish sentiment, as there are more call positions than bearish puts. Moreover, the max pain price for options stands at $3,750, a crucial level that may capture the interest of traders.
Currently, ETH is trading at $3,264, down 11.21%, with its market cap dipping under $400 billion. As the tide appears to shift, the market is watching closely to see if the ripple effects of the whale selloff will indeed lead to a crash below $2,800 or pave the way for a recovery. As emotions run high and worries about market instability grow, it’s crucial for investors to stay informed and exercise caution.
