Ethereum’s 4% Drop from Whale Profits May Signal Reversal Toward $4,800

• Whale Activity: A major investor realized $14.76 million in profits by selling 3,000 ETH on Binance, contributing to the immediate price drop.

• Exchange Movements: Binance transferred significant ETH amounts to entities like Wintermute and Bitget, adding to market selling pressure.

• Liquidity Outlook: With most liquidity stacked above current levels, a sweep of lower zones could trigger a bullish reversal targeting up to $4,800.

Ethereum ETH price decline hits 4% amid whale profit-taking and exchange sales. Explore liquidity impacts and reversal potential for investors navigating this crypto market shift.

What Is Causing Ethereum’s Current Price Decline?

Ethereum (ETH) has seen a notable price decline of approximately 4% over the last 24 hours, primarily due to partial profit-taking by large-scale investors, known as whales, and increased selling activity from major exchanges like Binance. This movement pushed ETH toward critical support levels around $3,600, where accumulated liquidity could either exacerbate the drop or set the stage for recovery. Despite the short-term pressure, on-chain metrics suggest underlying strength, with many holders maintaining positions in anticipation of future gains.

How Are Liquidity Clusters Influencing Ethereum’s Price Trajectory?

Liquidity clusters play a pivotal role in Ethereum’s price movements, particularly during periods of volatility like the current ETH price decline. On-chain analysis from platforms such as OnChain Lens reveals that most ETH liquidity is positioned above the current trading range, following the liquidation of long positions below $3,800. This distribution indicates that downward pressure may be short-lived, as markets often sweep lower liquidity zones—such as the $3,600 to $3,800 band—to eliminate weak hands before rallying.

Supporting data from market analysts, including insights shared by Ted Pillows on X, shows stacked liquidity extending upward, potentially driving ETH toward $3,900 and beyond if support holds. For instance, the recent wipeout of lower longs has cleared a path for accumulation, with historical patterns suggesting that such setups precede 20-30% upside moves. Expert commentary from CryptoQuant further underscores this, noting that Ethereum’s Market Value to Realized Value (MVRV) ratio at 1.5 reflects a profitable environment for holders, balancing fear and greed without extreme overheating.

In practical terms, if ETH dips to sweep the $3,600 liquidity, it could quickly reverse, targeting clusters above $4,000 and extending to $4,800 in the near term. This dynamic is common in cryptocurrency markets, where liquidity hunting by large players influences short-term trends. Traders monitoring these clusters should watch for volume spikes, as they often signal the transition from decline to recovery.

Frequently Asked Questions

What Role Did Whale Profit-Taking Play in Ethereum’s Recent 4% Price Drop?

Whale profit-taking significantly contributed to Ethereum’s 4% price drop, with a prominent investor selling 3,000 ETH on Binance for $14.76 million in gains. This whale, dubbed the “ETH Millionaire,” originally acquired the tokens two and a half months ago and retains 2,002 ETH, signaling ongoing confidence. Such large-scale sales create immediate downward pressure but often precede accumulation phases in bullish cycles.

Can Ethereum’s Price Reverse Upward After This Decline Driven by Exchange Sales?

Yes, Ethereum’s price has strong potential to reverse upward following the decline triggered by exchange sales, particularly from Binance moving ETH to Wintermute and Bitget. Once liquidity between $3,600 and $3,800 is cleared, upward momentum could push ETH past $4,000 toward $4,800. This scenario aligns with balanced market sentiment, where MVRV at 1.5 indicates profits without excessive greed, fostering a stable rebound.

Key Takeaways

• Profit-Taking Pressure: Whales realizing gains, like the $14.76 million sale of 3,000 ETH, accelerated the 4% decline but left holders optimistic with retained positions.
• Exchange Influence: Binance’s transfers of $1.50 million to $6.11 million in ETH to trading partners heightened selling, yet on-chain data shows this as temporary liquidity redistribution.
• Reversal Potential: Sweeping $3,600-$3,800 liquidity could ignite a rally to $4,800; monitor MVRV and volume for confirmation of bullish shifts.

Key Takeaways

What’s influencing ETH’s current downturn?

Partial profit-taking and Binance’s selling pressure caused Ethereum’s 4% decline on the day.

Will the price of ETH reverse?

Upon taking liquidity between $3,600 and $3,800, the price of Ethereum could target the clusters above $4,000, extending to $4,800.

Ethereum [ETH] declined by about 4% in the past 24 hours as some whales partially took profits. However, the altcoin was still trading around a key zone that could lead to a bounce back into bullish action.

These partial profits led to declining prices.

Whale take partial profits

Per OnChain Lens data, a whale pocketed about $14.76 million in gains after selling 3,000 ETH on Binance. The whale had earlier bought 8,009 ETH for $18.25 million about two and a half months ago.

This trader, referred to as “ETH Millionaire,” still held about 2,002 tokens, indicating confidence in further price appreciation.

Source: OnChain Lens

Moreover, Binance was moving ETH and Bitcoin [BTC] from its hot wallet. On average, between $1.50 million and $1.80 million worth of ETH was moved to Wintermute.

The biggest ETH position moved by Binance was worth $6.11 million, transferred to Bitget’s deposit address.

However, the analysis of liquidity and the behavior of investors indicated that the selling pressure may change.

Impact of liquidity clusters on Ethereum 

On the charts, most of ETH liquidity was stacked to the upside after most of the longs below $3,800 were wiped out.

However, there was still liquidity between $3,600 and $3,800, which needed to be swept to ignite a reversal.

The liquidity just above $3,600 suggested a move to the downside could happen first. This would scare away weak hands, a common practice before price rallies.

Consequently, ETH price could rise toward levels above $3,900, with the uppermost level in this short-term outlook at $4,800.

Source: Ted Pillows/X

On the other hand, the dynamic nature of these liquidity clusters could continue forming below $3,800. This would lead to price extending its stay between the $3,600 and $3,800 price levels.

Fear and greed in balance 

In the meantime, Ethereum’s MVRV was at 1.5, suggesting traders were in profit as the price stayed above the realized value of $2,560. The price of ETH has been consolidating between $2,560 and $5,760 levels.

As price stagnates between these two levels, it depicts balance between fear and greed. This is the silence that precedes price rallies, as ETH had been filled with the latter behavior when the altcoin season was in play.

Source: CryptoQuant

Altogether, Ethereum was still in a downward trend, with the fall accelerated by the recent partial profit-taking.

A price reversal to the upside, however, might be triggered by the liquidity clusters above the current price levels and the continuous accumulation.

Conclusion

The Ethereum ETH price decline of 4%, fueled by whale profit-taking and Binance’s wallet movements, highlights the volatile yet resilient nature of the cryptocurrency market. With liquidity clusters poised for a potential sweep and an MVRV ratio indicating balanced sentiment, ETH stands at a crossroads that could lead to renewed bullish momentum targeting $4,800. Investors should stay informed on on-chain developments to capitalize on upcoming opportunities in this dynamic space.