Ethereum Hemorrhages Value: Whales Dump, On-Chain Activity Slumps, But Price Shows Signs of Life

Ethereum (ETH), the world’s second-largest cryptocurrency by market cap, has been on a downward spiral, mirroring the broader market selloff.

Justin Sun Denies Liquidation Rumors

Amidst the chaos, Justin Sun, founder of Tron and owner of crypto exchanges Poloniex and Huobi, took to his X account (formerly Twitter) to dispel rumors that his liquidations triggered the ETH price plunge. On-chain data corroborates his claims, indicating he hasn’t sold his sizable Ethereum holdings accumulated since February.

Bloodbath on the Charts

Despite Sun’s reassurances, the market bloodbath continued. The price of ETH plummeted over 22% in 24 hours, crashing below the crucial $2,300 support level and reaching eight-month lows near $2,100.

ETH Whales Cash Out, On-Chain Activity Dwindles

Data from on-chain analytics platforms paints a grim picture. Whales, large investors, have been liquidating their positions en masse. One whale alone reportedly sold 9,834 ETH, worth over $23 million.

Furthermore, institutional investors seem to be pulling out. According to CoinShares, crypto investment funds experienced significant outflows last week, with over $146 million withdrawn from Ethereum products. This exodus is believed to be driven by fears of a global recession.

Ethereum Network Activity Plummets

The crash coincides with a decline in network activity. Metrics like the number of new and active addresses have been dropping steadily over the past month, suggesting reduced user engagement.

Spot Ethereum ETFs Fail to Impress

The recent launch of spot Ethereum ETFs in the US appears to have had a muted impact. While these products saw some inflows, they were offset by substantial outflows from the incumbent Grayscale trust.

ETH/USD Technical Analysis Hints at Potential Reversal

Despite the prevailing gloom, there have been some signs of recovery. The price of ETH has rebounded over 10% from its lows, currently consolidating around $2,500.

Technical indicators on hourly charts show bullish momentum returning. The MACD (Moving Average Convergence Divergence) is gaining traction in positive territory, and the RSI (Relative Strength Index) has moved above 50, indicating a potential shift in sentiment.

Key Resistance Levels to Watch

However, the road to recovery won’t be smooth. ETH faces significant resistance near $2,550 and $2,680. Overcoming these hurdles will be crucial for a sustained upward move.