Why Ethereum whales are on a selling spree

Ethereum (ETH) price continues to hover below the $2,000 psychological level with no directional bias in sight. As Bitcoin (BTC) price continues to move sideways, the threat of a further collapse intensifies, especially if the big crypto gives away the $30,000 support floor.

Also read: Ethereum creator Vitalik Buterin believes staked Ether is at risk of being stolen

Ethereum whales are not optimistic about ETH’s future

Ethereum (ETH) price remains at the whims of Bitcoin price due to the high correlation between the two. But other factors affect ETH, and investor activity is one of them. As seen in Santiment’s Supply Distribution chart, large investors – popularly known as whales – have been busy selling their Ether since the start of 2023.

Specifically, the number of addresses holding between 100,000 to 1,000,000 ETH has reduced from 124 to 112, a 9.67% drop. The same trend can be observed with addresses holding between 10,000 and 100,000 ether, which have declined from 1,187 to 1,135.

The addresses holding between 1,000 to 10,000 ETH, which are present in relatively large numbers, have shrunk from 5,715 on April 17 to 5,494 currently.

All in all, whales holding between 1,000 to 1,000,000 ETH show a relatively bearish trend. 

ETH Supply Distribution

Read more: Ethereum creator Vitalik Buterin believes staked Ether is at risk of being stolen

Ethereum price struggles with major hurdles

Ethereum (ETH) price has slipped below a crucial support floor at roughly $1,920. This level kept ETH from climbing higher from May 7 to June 30. The recent dip below this barrier is a sign that bulls are not in control.

Furthermore, a bearish divergence has developed between the price and momentum indicators. This setup occurs when the price produces higher highs, but the momentum indicator produces lower highs, denoting a rally despite the lack of buying pressure.

This nonconformity usually triggers a sell-off in the underlying asset’s price. 

As seen, Ethereum price dropped 4% from its local top of $1,974 formed on July 3 and is currently trading at $1,925. A decisive 4-hour candlestick close below $1,920 is likely to trigger a 7.70% sell-off to the $1,767 support level.

ETH/SUDT 4-hour chart

On the other hand, a decisive flip of the $1,920 barrier into a support floor on the daily timeframe wil build more confidence among sidelined buyers. Such a move will attract more capital and invalidate the bearish thesis.

This move could be a precursor that pushes ETH to $2,000 and beyond.