Ethereum Price Forecast: ETH risks 25% decline following the crypto market dip

Ethereum price today: $3,060

• Ethereum investors booked profits of over $430 million during the weekend.
• Whales and derivatives traders remain optimistic despite rising selling activity.
• Ethereum could experience a 25% crash if it sustains a high volume decline below the $3,000 support level.

Ethereum (ETH) is down 8% on Friday following rising selling activity in the crypto market after Chinese artificial intelligence startup DeepSeek went live. The top altcoin could be on the verge of validating a move that could send its price crashing over 25%. However, whales and derivatives traders remain optimistic, slowly buying the dip.

Ethereum selling activity rises, whales remain optimistic

A few Ethereum investors panicked and sold their assets over the weekend, sending the top altcoin below the $3,200 level. This is evidenced in the Network Realized Profit/Loss metric, which shows that investors booked profits of over $430 million on Saturday. With the price decline extending to Monday, some investors have realized over $50 million in losses.

ETH Network Realized Profit/Loss. Source: Santiment

The selling activity was initiated by both short-term and long-term holders as indicated by a spike in the Dormant Circulation metric across all age bands of investors. If this trend continues, ETH's decline could accelerate.

ETH Dormant Circulation. Source: Santiment

However, Ethereum's supply distribution reveals whales are slowly buying the dip, scooping over 120,000 ETH in the past three days.

ETH Supply Distribution (10K - 100K). Source: Santiment

A similar trend is visible in the derivatives market with the open interest of Ethereum futures rising to 9.77 million ETH on Monday despite the price decline. This indicates that investors may be betting on a quick price recovery as opposed to closing positions due to panic.

ETH Open Interest. Source: Coinglass

Meanwhile, in a Friday call, most Layer 2 executives agreed that they could implement "based" and "native" rollups to improve Ethereum's decentralization and liveness.

Additionally, venture capital firm Paradigm authored a post on Saturday calling for an acceleration in the pace of Ethereum development as opposed to slowing down upgrades to protect its decentralized status.

"There is reasonable debate about what Ethereum's north star should be. But wherever you think Ethereum should go, surely it is better to get there faster," the post states.

Ethereum Price Forecast: ETH could see a 25% crash if the $3,000 support level fails

Ethereum has experienced over $140.22 million in futures liquidations in the past 24 hours, per Coinglass data. The total amount of liquidated long and short positions accounted for $121.61 million and $18.62 million, respectively.

Ethereum is developing a Head-and-Shoulders (H&S) pattern on the 8-hour chart after declining below the $3,200 level — which bulls have defended in the past month. The top altcoin is moving toward the support near the $3,000 psychological level.

ETH/USDT 8-hour chart

If ETH sustains a high volume decline below $3,000, its price could crash over 25% to find support near the historically high demand zone of $2,200. The level is obtained by measuring the height of the H&S pattern and projecting it downward from the $3,000 level.

On the other hand, the $2,817 level, which served as a critical support level between April and July 2024, could help prevent such a sharp decline. However, a breach of this level will accelerate the bearish pressure.

On the upside, ETH could begin an uptrend if it rallies above a descending trendline extending from December 16.

The Relative Strength Index (RSI) and Stochastic Oscillator (Stoch) are below their neutral levels, indicating dominant bearish momentum.

A daily candlestick close above $3,550 will invalidate the bearish thesis.

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