Ethereum falls 4% as whales and ETF investors shed holdings

• Traditional investors are on a selling spree as ETH ETH extends its outflow to eight consecutive days of negative flows.
• Whales are also massively dumping ETH following the recent price drop.
• Vitalik Buterin holds 90% of his net worth in ETH.
• Ethereum is trying to move below a key trendline that suggests further price decline amid mixed signals from technical indicators.

Ethereum (ETH) fell nearly 4% on Tuesday amid increased selling pressure from ETH ETF investors and whales. The selling pressure also led to Ethereum co-founder Vitalik Buterin being accused of not believing in ETH as a store of value (SoV).

Daily Market Reasons: Ethereum ETF Flow, Whale Selling Pressure, Vitalik Buterin’s Net Worth

Ethereum ETF investors haven’t stopped shedding their holdings yet, after the products saw $13.2 million in net outflows on Monday, according to data from Farside Investors. As a result, ETH ETFs extended their streak of negative flows to eight consecutive days of net outflows.

Unlike previous days, when Grayscale’s ETHE outflows outpaced inflows from other issuers, none of the eight new ETH ETFs saw inflows. Fidelity’s FETH, Franklin’s EZET, and Grayscale’s ETHE saw outflows of $2.7 million, $1 million, and $9.5 million, respectively.

A similar trend is occurring among investors in the traditional crypto market, where more whales have ditched ETH by depositing on centralized exchanges in recent hours, according to data from Lookonchain:

• A whale that withdrew 5,088 ETH worth $17.24 million from Binance at $3,389 sold all his holdings for $13.58 million for a total loss of $3.66 million.
• Two whales to liquidate on Aave sold a total of 8,208 ETH worth $21.59 million.
• Another whale asked to remove 30,000 ETH. Balena claimed and deposited 19,000 ETH worth $49.17 million to Binance for a potential sale.
• Shortly after, another whale traded 4,591.8 stETH for 4,589.5 ETH at a loss of 2.3 ETH to avoid the withdrawal queue. Balena eventually deposited 5,145 ETH worth $13.3 million to Binance.

Following strong selling pressure, several members of the crypto community accused Ethereum co-founder Vitalik Buterin and core developers of not believing in ETH as a store of value (SoV). However, Buterin denied the claims, stating that he holds 90% of his net worth in ETH.

ETH Technical Analysis: Ethereum drops below key trendline as indicators signal mixed sentiment

Ethereum is trading around $3,580 on Tuesday, down 4% on the day. In the last 24 hours, ETH has seen total liquidations of over $48 million – the largest in the crypto market. The recent drop in price liquidated several long positions worth $46.46 million, while short positions saw liquidation of only $1.8 million.

Ethereum is trying to break below a key trendline which suggests its price could test the lower ascending trendline of a key triangle. Such a move could see ETH find support around the $2,000-$2,300 range before staging a rally.

ETH/USDT Daily Chart

ETH saw similar declines from August 2022 to November 2022 and from July 2023 to October 2023 before rallying on both occasions. If ETH completes this move, it could attempt to approach the upper descending trendline of the triangle and eventually challenge its yearly high of $4,093.

The Relative Strength Index (RSI) crossed below its moving average on Monday, indicating bearish momentum.

After posting a bearish signal when the %K line crossed below the %D line around the overbought region, the Stochastic Oscillator (Stoch) signals bearish momentum at 22. A move into the oversold region below 20 could indicate a potential buying opportunity.

The Awesome Oscillator (AO) continues to show consecutive lower green bars below the zero line. A continuation of this move could signal easing bearish pressure.

The thesis will be invalidated if ETH breaches the lower uptrend line of the triangle.