Ethereum Is Flat, and Whales Selling: More Pain to Follow?

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As a seasoned researcher with years of experience observing the cryptocurrency market, I’ve seen my fair share of bull and bear runs. Currently, Ethereum seems to be stuck in a narrow range, which is causing concern among investors. The recent selling pressure from whales holding 10,000 ETH or more, combined with the outflows from spot ETH ETFs, are clear signs that something might not be right in the short term.

Currently, Ethereum is finding it tough to gain traction and continues to face significant selling force. At this moment, the second-largest cryptocurrency is confined within a limited price range. On the lower end, it’s hovering around $2,100, while on the upper end, it’s at approximately $2,800.

The local resistance level could mark the start of an impressive leg up, relieving the coin of the current sell grip from early August.

Ethereum Whales Selling

While optimism is high among backers, who anticipate the coin’s value to climb further and surpass nearby sell-off thresholds as part of an ongoing uptrend, there remains a sense of unease. Examining Ethereum’s price movements suggests that it might experience additional declines.

A particular expert, referring to recent on-chain activities, points out that large Ethereum holders, those possessing more than 10,000 ETH, have been actively offloading their assets for the past month. This consistent selling could indicate that these influential entities, who are frequently observed, may not be optimistic about future prospects.


 

Consequently, others might decide to sell off their assets, causing an excess of supply. Given the dynamics of the market, such an increase in supply might lower prices, potentially slowing the progress towards surpassing current obstacles.

Massive Outflows From Spot ETH ETFs

Analysts are similarly disappointed by the recent developments in Ethereum spot ETFs. In May, an unexpectedly swift approval of 19b-4 forms by the SEC led to a surge in prices. Similarly, the approval of S-1 registration forms was well-received, pushing prices beyond $3,000.


 

After the product was launched and started trading, there were actually more withdrawals, particularly from Grayscale’s ETHE. At the same time, demand has been less than anticipated. Since it first became available, approximately $247 million worth of ETH has been withdrawn from ETHE. As a result, prices have been struggling and moving further away from the highs reached in March 2024.

Based on Farside data, Ethereum ETF providers experienced withdrawals totaling approximately $6.5 million on August 20th. The majority of these withdrawals were due to large-scale redemptions from the ETHE product. This trend of withdrawal has been ongoing since August 15th.

As an analyst, I’m observing a trend that indicates while the smart contracts platform provides value, Ethereum’s short-term to mid-term forecast appears to be bearish. Consequently, investors seem to be opting for other avenues to allocate their capital at this time.

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2024-08-22 10:16