Ethereum Slumps Below $3,200: Whales Sell 10,070 ETH as Market Turns Bearish
Ethereum price has experienced a significant decline in the past 24 hours, dropping by nearly 2%. This bearish trend began at the start of
Live ETH/USD Chart
Ethereum price has experienced a significant decline in the past 24 hours, dropping by nearly 2%. This bearish trend began at the start of the new week, with the altcoin breaking below its crucial weekly support level of $3,200.
This breach triggered increased selling pressure, pushing ETH/USD to its lowest point since November 21, 2024.
Why Did Ethereum Price Decline?
Several factors have contributed to this price decline. Firstly, the Ethereum futures market has exhibited a bearish sentiment. In the past two weeks, over $90 million worth of leveraged positions were liquidated, with a significant portion of these being long positions. This indicates that a considerable number of traders were betting on the price of Ethereum to rise, and these positions were forcibly closed out when the price dropped below $3,000, further exacerbating the downward pressure.
Secondly, the underlying demand for Ethereum has weakened over the past year. Despite the transition to the Proof-of-Stake (PoS) consensus mechanism, which was expected to make Ethereum deflationary due to ETH burns, the supply rate has actually increased faster than the burn rate. This effectively makes the supply of Ethereum slightly inflationary, indicating a decline in demand.
Upcoming Ethereum Pectra Upgrade
An important development on the horizon is the upcoming “Pectra” update for the Ethereum network, scheduled for implementation in February 2025. This major upgrade aims to significantly enhance the Ethereum ecosystem in several key areas:
- Improved User Experience: The Pectra update will introduce Account Abstraction (AA), a groundbreaking feature that allows users to pay gas fees with stablecoins like USDC instead of ETH. This will significantly lower the barrier to entry for new users and improve the overall user experience.
- Protocol Enhancement: The update includes a proposal to increase the effective staking balance of validators from 32 ETH to 2048 ETH. This will provide significant economic advantages to large-scale stakers, improving the efficiency and scalability of the Ethereum network.
- Expanded Data Availability: The Pectra update will introduce the Verkle Tree, a novel data structure that improves the efficiency of data storage and retrieval on the Ethereum network. This will reduce hardware requirements for node operators and enhance the overall efficiency of the network.
ETH Whale Analysis
Recent reports suggest that some Ethereum whales are selling off their holdings, potentially contributing to the ongoing price decline. For example, on January 13th, 2025, blockchain analytics firm Lookonchain reported that three wallets, likely belonging to the same whale, sold 10,070 ETH for $33 million in Dai, incurring a $1 million loss. This significant sell-off occurred at a time when Ethereum’s price was already under pressure, potentially exacerbating the decline.
ETH/USD Technical Analysis
- Support Levels: $2,800 (key level and weekly Fair Value Gap), $2,100 – $2,500 (historically high demand zone)
- Resistance Levels: $3,200 (previous support), $3,350, $3,450, $3,500
- Indicators:
- RSI and Stochastic Oscillator are in oversold territory, indicating a potential price bounce back.
- Daily candlestick close below $2,817 could send ETH towards $2,100 – $2,500 zone.
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