Ethereum (ETH) has recently experienced a significant drop in value, falling below the $2,000 mark and erasing $46 billion in market value within a week. This decline has brought ETH back to the $1,900 range for the first time in two years, making it the weakest performer among high-cap cryptocurrencies with a 10.64% weekly decline. Despite this, there are signs that this could present a potential buying opportunity for traders.
One notable event in the Ethereum market was the reemergence of a dormant ETH whale that had been inactive since the initial coin offering (ICO). This whale transferred 7,000 ETH (equivalent to $13.8 million) to the Kraken exchange as ETH plummeted to $1,760, its lowest level since October 2023. Even as ETH rebounded to $1,900, the whale still holds a substantial amount of ETH, which could lead to further selling pressure and deeper corrections in the near future.
Exchange inflows should be closely monitored by ETH traders, as declining exchange reserves indicate accumulation, while rising liquidations and negative funding rates suggest that short-sellers are gaining control. Over $110 million in ETH long positions were liquidated in the past 24 hours, adding to the bearish sentiment in the market.
Additionally, a spike in 180-day dormant circulation as ETH broke below $2,100 suggests a surge in long-term holder sell-offs, indicating a distribution phase that could further weigh on ETH’s short-term price action. The current market environment has pushed ETH below its realized price for the first time in two years, resulting in an unrealized loss for the average holder.
Looking ahead, identifying key support zones for ETH is crucial. Immediate support is seen at $1,592, with a break below this level potentially leading to further downside. Dips below the realized price have historically signaled capitulation zones, and with dormant ETH whales selling off, this trend may continue.
In conclusion, while the Ethereum market faces challenges with declining prices and increased selling pressure, there are opportunities for traders to navigate this volatile market. Monitoring exchange inflows, key support levels, and market sentiment will be essential for making informed trading decisions in the coming days.