Ethereum Faces Decline as Major Players Liquidate Positions

Ethereum Faces Decline as Major Players Liquidate Positions – But One Indicator Suggests Hope

Ethereum is currently under significant pressure as the overall market downturn drags altcoins down alongside it. After hitting a peak close to $4,900 earlier in this cycle, Ethereum has remained in a downward trend with only fleeting attempts at recovery. As of now, ETH is trading near $2,856, reflecting a daily decrease of 2.36% and about 10% over the week.

Key Takeaways

Ethereum's price has dropped to $2,856, with recent selling pressure from both whales and institutions.
Major whale activity included significant deposits and profit-taking actions, reflecting diminishing confidence.
Institutional investors have recorded substantial outflows from Ethereum Spot ETFs.
ETH remains in a bearish trend, but recent exchange activity hints at potential demand, indicating a possible short-term rally if key support levels hold.

Ethereum [ETH]

This ongoing decline has prompted both whales and institutions to exit their positions.

Whales Move to Liquidate Holdings

On-chain data indicates that a prominent Ethereum (ETH) whale is increasingly taking profits. According to Onchain Lens, this whale deposited 7,654 ETH—approximately worth $21.62 million—into Binance, with the transaction realizing around $4 million in profit.

Earlier that same day, the same wallet sent another deposit of 10,169 ETH, valued at around $29.77 million, garnering an additional profit of about $11.36 million.

Ethereum whale deposits

Source: Onchain Lens

In total, this whale offloaded 17,823 ETH, equating to around $51.4 million through Binance deposits. Blockchain records reveal that the whale initially withdrew 19,505.5 ETH and staked it, later redepositing 20,269 ETH. This strategy netted about 763.58 ETH in staking rewards. Following these latest transactions, the cumulative realized profit approached $15.36 million. Historically, whale selling during extended downtrends signifies diminishing confidence, as large holders often sell off to mitigate perceived risks of further declines.

Institutions Signal Increased Bearish Sentiment

In addition to whales exiting the market, institutional investors have also been heavily engaged in sell-side activity. Data from SoSoValue indicates that Ethereum Spot ETFs have faced net outflows for five consecutive sessions. During this timeframe, total outflows reached around $533.25 million.

Ethereum spot etfs

Source: SoSoValue

On December 17th, for instance, outflows surged to -$22.43 million, demonstrating substantial selling pressure. Consequently, Ethereum’s Spot ETFs saw their Total Assets plummet from $21 billion to $17 billion, marking a $4 billion decrease in just five days. This prolonged period of outflows implies that institutions are becoming bearish and reducing their exposure, reflecting a lack of conviction in the market.

Will There Be a Breakdown or a Rebound?

Ethereum's price actions reflect this cautious sentiment. Sellers continue to defend higher levels while buyers struggle to sustain rebounds, resulting in ETH remaining locked in a wider downtrend. Momentum indicators back the bearish outlook, as seen with the Stochastic Momentum Index, which has fallen into oversold territory—indicating significant downward pressure.

ETH SMI & FIB

Source: TradingView

Currently, ETH is trading just above the 0.618 Fibonacci Retracement level near $2,807. A failure to maintain this level could lead to a drop towards the 0.786 retracement around $2,633. However, exchange activity hints at a possible short-term shift.

Ethereum exchange netflow

Source: CryptoQuant

Exchange Netflows have shown a sharp negative shift, dropping to about -47,100 ETH from a previous +46,000 ETH the day before. This movement suggests declining sell-side pressure and the emergence of demand. If buyers can defend the $2,807 mark, ETH may attempt a rebound toward $2,929, with stronger recovery potential reaching resistance near the $3,200 region.