Ethereum Price Forms Symmetrical Triangle Amid Whale Selling: Is a Crash Imminent?

Ethereum's price has struggled to regain momentum after hitting a local low, exacerbated by significant selling from large investors known as "whales." The formation of a multi-month symmetrical triangle pattern indicates potential further declines in the price. With recent statistics showing a decrease in wallet holders and a drop in total value locked in DeFi protocols, the outlook for Ethereum remains cautious.

Key Takeaways

Ethereum has experienced a 2.5% decline over the past week and a 5% drop from this month's high of $3,292.
Whale selling has led to a significant decrease in wallets holding large amounts of ETH since mid-December.
There’s a noticeable decline in interest from institutional investors and derivative traders.
A symmetrical triangle formation on the price chart suggests possible bearish tendencies.
Key support and resistance levels for traders to monitor are $2,619 and $3,269, respectively.

Ethereum price forms symmetrical triangle as whales sell, will it crash?

Main Content

Ethereum's price is currently navigating challenges after struggling to rebound from a recent local low. The ongoing sell-off by large investors, also known as whales, is contributing to a negative trend, and a multi-month symmetrical triangle pattern is indicating that more declines may be on the horizon.

As reported by crypto.news, Ethereum (ETH) has seen its price fall by 2.5% over the past week and is down 5% from this month’s peak price of $3,292. Currently trading at $3,115, Ethereum is approximately 37% lower than its all-time high reached in August last year.

The pressure on Ethereum’s price this month has been primarily associated with significant selling by whales. According to data from Santiment, the number of wallets that hold between 10,000 and 1 million ETH has been decreasing steadily since mid-December, suggesting that large holders are scaling back their positions.

The number of addresses holding 10k-1 million ETH tokens have dropped since mid-December last year.
Source: Santiment

Such large-scale token sell-offs by whales can create panic among retail investors, leading to a cascade of further selling and diminishing confidence in the market.

Additionally, the outflows from spot Ethereum ETFs have not been beneficial. Data from SoSoValue indicates that U.S. spot Ethereum ETFs have lost over $345 million over the last four trading sessions. This weak demand from institutional investors may be contributing to a reluctance among retail investors to re-enter the market until clearer signals appear.

On-chain statistics further indicate weaknesses in Ethereum's fundamentals that could be negatively impacting its price. Data from DeFiLlama reveals that the total value locked (TVL) across DeFi protocols on the Ethereum blockchain has plummeted from a peak of $257 billion in September to $175 billion now. A declining TVL often suggests a slowdown in network usage and investment inflows, which points to waning investor confidence in the Ethereum ecosystem.

Moreover, derivative traders are showing diminishing interest in Ethereum. According to CoinGlass, open interest in Ethereum futures has fallen from a peak of $70 billion in August to $39 billion at the present time, indicating a marked decline in speculative trading.

Since August, Ethereum's price has dropped more than 36%. As observed on the daily chart, Ethereum has been forming a symmetrical triangle pattern since early November of the previous year. Typically, a drop below the lower trendline of such patterns signals a bearish trend, at least in the short term.

Ethereum price has formed a symmetrical triangle and an inverse cup and handle pattern on the daily chart — Jan. 13 | Source: crypto.news

The charts are also showing signs of a larger-scale inverse cup and handle pattern. The neckline of this pattern is positioned at $2,619. Therefore, if Ethereum falls below the psychological support level of $3,000, it could potentially lead to further declines toward the November 21 low at $2,619, which aligns with the neckline of the cup and handle pattern. Traders are likely to keep a close eye on this level as a crucial support point.

If the price decisively breaks below this key support, it could heighten selling pressure, potentially pushing Ethereum down to as low as $2,121. Conversely, if Ethereum's price manages to rise above the $3,269 resistance level, which corresponds with the 61.8% Fibonacci retracement level, it could invalidate the bearish setup and pave the way for higher price targets ahead.