Key Points
- Ethereum (ETH) is experiencing significant dumping by institutions and whales, causing a notable drop in price.
- Despite the bearish market, Ethereum’s Relative Strength Index (RSI) suggests a potential trend reversal.
Ethereum, the second-largest cryptocurrency in the world, is witnessing a substantial sell-off by institutions and whales. This has led to a significant decline in its price.
Institutions Selling Off ETH
According to a post on X, institutions offloaded a hefty 55,035 ETH, equivalent to $123 million, to Binance during Asian trading hours. This large-scale dumping was carried out by Wintermute, a prominent algorithmic trading firm, and Metalpha, a digital asset manager. The firms dumped 46,947 ETH ($104.74 million) and 8,088.8 ETH ($18.05 million) respectively, within a span of two hours. This massive offloading could potentially affect the price of the altcoin.
The current bearish market sentiment, the continuous rise in exchange ETH reserves, and the decrease in Futures Open Interest for three consecutive months are speculated to be the reasons behind this dump. CryptoQuant reports that Ethereum exchange reserves have been on a steady rise since 28 August. This suggests that whales, investors, or institutions might be transferring their assets to exchanges for a potential sell-off.
Ethereum’s Technical Analysis
A glance at the price charts indicates that Ethereum has retested its key support level of $2,140, a level that has acted as a strong support for ETH since late 2023. Interestingly, the Relative Strength Index (RSI) of Ethereum formed a bullish divergence on the daily time frame, hinting at a possible trend reversal. This, combined with the recent retest of support, suggests a high likelihood of ETH’s price rising by 25% or 30% to $2,500 or $2,550.
In the shorter timeframe, there are some bullish indicators for ETH. For example, CoinGlass’s ETH Long/Short ratio on a four-hour timeframe was 1.168 at press time, indicating bullish sentiment. Additionally, data showed that 53.88% of top traders held long positions, while 46.12% held short positions. Over the same period, total ETH Futures Open Interest increased by 1.80%, indicating increased trader participation as ETH revisited its strong support level.
At press time, ETH was trading around the $2,280-level, following a 2% decline in the last 24 hours. Its trading volume over the same period surged by almost 100%, indicating increased participation from traders and investors.
