Ethereum’s $2,868 Breakout Compromised by Whale Selling

Over the past few days, Ethereum (ETH) whales have been relentlessly selling their coins, dampening market dynamics. Whale influx into cryptocurrency exchanges has surged, indicating a strong profit motive as the coin’s price has soared by double digits over the past seven days.

A surge in selling pressure will likely limit Ethereum’s near-term upside. Here’s how.

Ethereum Whales Benefit from Rising Prices

Over the past week, the price of Ethereum has increased by 14% and was trading at $2,644 at the time of publication. However, this rally may face resistance due to recent sell-offs by some large stockholders, or “whales.”

On Monday, an early Ethereum initial coin offering (ICO) participant who received 150,000 ETH in the Genesis block, now worth over $389 million, contributed 3,510 ETH ($9.12 million) to Kraken after more than two years of inactivity.

Over the weekend, another major whale known for holding large amounts of ETH also sold off coins. Onchain analyst Spotonchain said in a post on X that the whale contributed 15,000 ETH ($38.4 million) to exchanges. This whale has a history of selling ETH shortly before the market crashed. In July, he sold 10,000 ETH ($34.2 million) before prices fell 7.6%, and in August he sold 15,000 ETH ($39.7 million) just before prices fell 2.5%.

Read more: How to invest in Ethereum ETFs?

Ethereum offering on exchanges. Source: Santiment

Due to the actions of these whales, the supply of ETH on crypto exchanges has increased. Cryptocurrency exchanges currently hold 21.45 million ETH, worth over $56 billion. Since September 20, a total of 30,000 ETH have been sent to exchanges, valued at $79.20 million at current market prices.

When the supply of an asset on exchanges increases, especially when there are significant deposits from whales, this indicates profit-taking activity. This could put downward pressure on the price of the asset as more sellers in the market could lead to oversupply, especially if new demand does not enter the market.

ETH price forecast: The price could rise to $2868 or fall to $2111

The decline in the number of new addresses created for ETH trading over the past week supports this prediction. Data from IntoTheBlock showed a 43% decline in new addresses trading the altcoin over the past seven days. Over the same period, the number of active addresses on the network also fell by 18%.

Daily active Ethereum addresses. Source: IntoTheBlock

When the number of active addresses of an asset falls, this can put downward pressure on its price. A decrease in network activity can lead to a decrease in demand for the asset and an increase in selling by holders who want to close their positions due to fear of losses.

Ethereum’s recent 14% rise has pushed its price above the $2,579 resistance level. However, continued profit-taking by ETH whales could make it difficult for the coin to return to $2,868.

If the broader market also begins to dump coins, Ethereum price could retest the $2,579 level. If this support fails, the price could fall 18%, potentially reaching the August 5 low of $2,111.

Read more: Ethereum (ETH) price forecast for 2024/2025/2030.

Ethereum price analysis. Source: TradingView

Conversely, if whales stop selling and new demand enters the market, Ethereum could rise another 8% with a strong chance of breaking the key resistance at $2,868.

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