Will Ethereum Whale Selloff Trigger ETH Price Crash Under $2,800?

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As a seasoned researcher with over a decade of experience in the volatile world of cryptocurrencies, I have seen my fair share of market turbulence and dramatic price swings. The recent selloff by Ethereum whales and the subsequent crash of ETH under $3,300 is yet another reminder of the rollercoaster ride that is the crypto market.

Ethereum (ETH) price has crashed over 11% dropping under $3,300 in the last 24 hours amid selloff by the Ethereum whale entities as well as the Ethereum Foundation. With ETH falling under the crucial support of $3,500 today, there have been heavy liquidations of long positions with analysts expecting the next support around $2,800.

Ethereum Whales Selloff in Massive Quantity

In the midst of a widespread slump in the cryptocurrency market, large Ethereum holders (whales) have decided to sell off significant amounts, causing a pessimistic mood towards the asset. According to blockchain analytics firm Lookonchain, one such whale transferred 22,746 ETH, equivalent to $77.7 million, to Binance today and withdrew stablecoins to repay loans on Aave and Spark platforms.

For the past two days, the same large-scale investor (whale) has added a grand total of 31,968 ETH, equivalent to around $122.3 million, into Binance. Meanwhile, another whale moved 49,910 ETH, or roughly $170 million, into Binance over the last eight hours and later withdrew approximately $137.8 million in stablecoins from the exchange.

Consequently, the volatile conditions in the cryptocurrency market have led to massive liquidations of Ethereum, causing investors to settle their outstanding debts. Since its rejection at $4,000, the value of Ethereum has dropped by over 17.5%, as reflected in its current price level.

Approximately two days ago, with Ethereum (ETH) priced around $4,000, the Ethereum Foundation chose to dispose of an additional 100 ETH from their assets. This move suggests a deliberate sale by the Foundation, potentially at a peak price point.

The Ethereum Foundation carried out 32 transactions over the last year, disposing of a combined 4,466 ETH, which is roughly equivalent to $12.6 million. Interestingly, it was found through Arkham Intelligence’s data that 15 of these transactions occurred around market highs.

On Thursday, aside from the large-scale selling off by Ethereum whales, there was an outflow of approximately $60 million from spot Ethereum Exchange Traded Funds (ETFs). This followed several days of inflows. Notably, most of these outflows, around $58 million, were due to withdrawals from Grayscale’s ETHE product.

Will ETH Price Crash to $2,800 Again?

According to many crypto market analysts, Ethereum’s price is predicted to decrease to approximately $2,800, then potentially drop even lower for a period of re-accumulation. A well-known cryptocurrency analyst named Caleb Franzen has presented an inverse head-and-shoulders pattern for Ethereum, suggesting that it’s trending downwards towards another low of $3,000. After reaching this low, the price could then rise to around $4,000.

Given that our attempts are being denied at this year-to-date high, it seems like a great chance for us to complete the final part of the inverted head and shoulder pattern,” he pointed out.

This year in 2024, Ethereum has largely underperformed other altcoins testing investors’ patience. However, the Ethereum bulls believe that once ETH crosses $4,100, the surge to an all-time high will be very fast. Popular crypto analyst Ted Pillows noted:

It appears that $4,000 could be the new equivalent of $1,400 for Ethereum. In the 2020-21 cycle, Ether repeatedly failed to surpass $1,400, but eventually succeeded. Currently, we’re seeing a similar pattern with the $4,000 level, but a breakthrough is imminent. Once Ethereum closes above $4,100, a new all-time high will likely be reached swiftly.

Despite significant Ethereum sales by large investors (whales), data from Deribit suggests that the current situation isn’t entirely bleak for ETH. In fact, 173,000 ETH options recently expired with a total value of $590 million. This data reveals a higher number of bullish call positions compared to bearish puts, as evidenced by a Put/Call ratio of 0.5.

Currently, as I write, Ethereum’s price stands at approximately $3,264, marking a 11.21% decrease from the press time value. This dip has also lowered its market capitalization below the $400 billion threshold. According to data from Coinglass, the open interest has seen a drop of 10.53%, now sitting under $25 billion. Additionally, the 24-hour liquidation has spiked to an impressive $226 million, with a significant portion, approximately $198 million, attributed to long liquidations.

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2024-12-20 14:08