Ethereum Whales Aim for Fall, But Here’s Why ETH May Drop to $2.3K
Ethereum whales jumped on the “dip” as prices fell to $2.3 million. Uncertainty still lurks despite a slight rebound.
Market enthusiasts have noticed a significant Ethereum move from a major whale that has been quickly analyzed for possible upside. This activity, in the opinion of many traders, could be a signal of an upward trend on the Ethereum price charts. Historically, the market movements of these whales have often provided clues to possible price fluctuations, fueling curiosity about whether a price spike is in the offing.
Ethereum [ETH] has experienced its most difficult market cycle yet. It has fallen more than 6% in one week. It is the worst performing of the top five altcoins. This decline raises critical questions about its future.
Ethereum’s resilience will be tested in the coming weeks amid growing competition from Solana [SOL] and evolving market dynamics, especially as…
Excessive Leverage in the Market
Historically, an increase in the margin lending index has triggered a forced sell-off, resulting in a price decline until the index returns to normal levels. Simply put, when this ratio rises sharply, it indicates that too many traders are borrowing money to bet on higher prices, often leading to a market pullback. Traders should be wary of these trends because they usually precede a market correction.
Recently, the ratio has risen from 38 to 72, indicating a significant amount of debt in the USDT. Long positions can indicate bullish sentiment. However, they can also spell trouble, especially in a volatile market.
If prices start to fall, the traders who borrowed the funds may be forced to quickly sell their assets to cover what they borrowed, causing prices to fall further.
This pattern has been seen before, when sudden increased borrowing indicates potential short term problems. As such, Ethereum could be set for further falls if the bulls fail to step in and support the price.
Ethereum on the Verge of a Key Support Line
Santiment pointed out an important development that could help Ethereum avoid a pullback in a recent post on X (formerly Twitter).
ETH is trading at $2,468 at the time of publication. It has reached a key support line that has been tested four times in less than two months. The repetition of this test reinforces the idea that the current price may be a solid buying opportunity on dips.
Furthermore, Ethereum’s whaling activity spiked to a six-week high as the price fell to $2,380 on October 25th. This spike in whaling indicates accumulation by large players with significant capital to invest.
While the current price level may attract investors, it does not guarantee an immediate rebound. Nevertheless, this trend is certainly encouraging.
However, uncertainty persists due to excessive volatility resulting from an increase in open interest (OI) to $13 billion, which makes ETH more susceptible to sudden price swings.
A large influx of long positions could be triggered, especially if Bitcoin continues its downtrend.
With this in mind, it will be essential to keep a close eye on the $2.4K support level. A possible divergence could take ETH closer to $2.3K, which could set the stage for a reversal.
Given that futures traders currently have significant influence, Ethereum’s next move may ultimately depend on how this support level holds in the coming sessions.
By Audy Castaneda