Ethereum Faces Potential Correction as Whale Activity Declines and Selling Pressure Rises

• Ethereum faces significant selling pressure as whale activity dwindles, pointing toward a potential market correction.

• Recent data indicates a shocking 63.8% decrease in large transactions, suggesting diminished confidence among major investors.

• According to a COINOTAG source, a notable Ethereum holder liquidated 2,001 ETH for $3.82 million, raising concerns about the future price trajectory.

Ethereum is under pressure as whale transactions decline sharply, leading to increased selling signals and potential market corrections.

Ethereum Whale Activity Signals Potential Correction

The Ethereum ecosystem is witnessing a profound shift as whale activity significantly diminishes. Current analysis reveals a 63.8% drop in large cryptocurrency transactions since late February, reflecting an alarming decrease in whale participation. Over the last fortnight, these substantial holders have offloaded over 760,000 ETH, intensifying selling pressure within the marketplace. Additionally, a long-term holder recently sold their entire remaining 2,001 ETH for approximately $3.82 million—a pivotal move indicating a potential shift in market sentiment.

Market Structure Weakens Amid Whale Exits

This exit strategy among whales poses challenges for retail investors, who often find it difficult to absorb excess selling pressure. As a result, Ethereum’s bullish structure is now compromised, leading many market analysts to cautiously observe whether Ethereum can maintain crucial support levels. Immediate demand recovery is essential to stave off potential price declines, with the coming period being particularly critical in gauging whether the market stabilizes or journeys further downward.

Ethereum Forms a Double Bottom – Can Bulls Take Control?

At the current trading price of $1,863.12, Ethereum is showing signs of a potential double bottom around the critical $1,800 support zone. This pattern could signal a recovery attempt by bullish traders; however, the resistance levels at $2,116.59 and $2,545.80 are proving difficult to overcome. Without breaking these crucial thresholds, the formation could result in a fleeting rebound rather than a sustained upward movement.

Liquidation Data Shows Resistance Ahead for ETH Bulls

Further complicating the outlook for Ethereum is the recent liquidation data, which has revealed heavy activity in the $1,900 to $1,950 range. This highlights a concentration of leveraged traders facing forced liquidations, underlining the prevailing resistance against upward movements. Maintaining levels above this zone remains a significant challenge, especially in the absence of renewed buyer confidence.

Source: Coinglass

Address Stats Show Declining Network Demand

On-chain metrics point to a troubling decline in Ethereum’s network activity, with new addresses dropping by 10.41% and active addresses falling by 8.25% over the past week. Alarmingly, there has been a 26.16% increase in zero-balance addresses, signifying a trend toward wallet abandonment. This reduction in user activity highlights a contraction in participation and suggests declining demand fundamentals for Ethereum.

Source: IntoTheBlock

Ethereum Exchange Reserves Climb as Sell Pressure Increases

The total Ethereum held on exchanges has risen to $33.98 billion, marking a 0.77% increase in just 24 hours. This rise in exchange reserves typically signals that more investors are preparing to part with their holdings, rather than maintaining them. Coupled with increasing whale exits and declining network activity, this trend hints at further downside pressure unless demand characteristics change significantly.

Source: CryptoQuant

What Next for ETH?

In summation, Ethereum appears to be at a pivotal junction, with a marked decline in whale transactions, climbing exchange reserves, and increasing zero-balance addresses suggesting dwindling demand and intensifying selling pressure. Although the potential double bottom pattern hints at a possible rebound, the lack of strong momentum in buying raises concerns over sustained price stability in the near term.