Ethereum (ETH) Faces Post-ETF Approval Sell-Off, Whales and Long Liquidations Intensify

Just two days after receiving long-awaited regulatory approval, Ethereum (ETH) is experiencing a price correction, confirming fears of a “sell the news” scenario. This mirrors the price action observed after Bitcoin ETFs were launched, with investors seemingly locking in profits after the initial hype.

At the time of writing, ETH is trading around $3,177, a drop of over 10% since the ETF approval. This decline follows a robust rally in the days leading up to the green light, with ETH reaching a 21% premium from its July lows. Technical indicators like the MACD further support the bearish sentiment, hinting at a potential trend reversal.

ETH Whales Capitalize on Liquidity, Longs Get Squeezed

The sell pressure seems to be fueled by whales taking advantage of the increased liquidity introduced by the Ethereum ETFs. On-chain data reveals a significant transfer of ETH from Grayscale to Coinbase Prime, suggesting these large investors are contributing to the price drop.

Meanwhile, discounted prices are attracting some buyers. BlackRock’s (iShares) Ethereum ETF has been accumulating ETH, adding to its holdings despite the price decline.

The bearish trend has also triggered long liquidations, further exacerbating the price drop. Data shows a significant decrease in net longs since the price peaked around $3,500. This suggests many investors who bet on a continued rise after the ETF approval are now facing losses.

Ethereum Price: A Potential Rebound or Deeper Dive?

While ETH is currently recovering slightly, the future remains uncertain. Technical analysis suggests resistance near $3,350 and potential support around $3,180.

A break above the resistance could signal a return to bullish momentum, potentially aiming for a test of the $3,500 zone again. However, a failure to hold the support levels could lead to a deeper decline towards $3,020 or even lower.

ABOUT THE AUTHOR See More

Arslan Butt

Index & Commodity Analyst

Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.

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