Ethereum Drops 15% as Whales Sell, Market Sentiment Sours

Ethereum (ETH) has recently experienced a significant sell-off, with its price dropping below the critical $2,000 threshold. This decline has been accompanied by rising liquidations and a bearish sentiment across the market, raising concerns about the stability of the cryptocurrency market. The situation has been exacerbated by the activity of whales—large holders of ETH—who have been actively moving their assets, which could indicate further sell-offs.

The Ethereum market recently witnessed a pivotal on-chain event, as a long-dormant ETH whale re-emerged, transferring 7,000 ETH to an exchange. This significant transfer coincided with ETH’s decline to around $1,760, representing its lowest level since October 2023. Despite a subsequent rebound to the $1,900 mark, the whale still holds an impressive amount of ETH valued at approximately $50 million. This backdrop raises concerns about whether further selling might ensue, potentially leading ETH into deeper corrections given current market conditions.

Traders are urged to monitor exchange inflows closely, particularly following the recent moves by a dormant whale. The declining exchange reserves signaling accumulation may be overshadowed by the ongoing market downturn and increased liquidations. In the past 24 hours alone, a significant amount of ETH long positions were liquidated, and the negative funding rates on major exchanges indicate that short-sellers are gaining the upper hand.

A spike in 180-day dormant circulation indicates a marked increase in long-term holders offloading their positions, aligning with a typical distribution phase that may further weigh on ETH’s short-term trajectory. ETH’s descent below its realized price for the first time in two years signals a concerning trend where the average holder is currently at an unrealized loss. Currently trading at $1,917, ETH has dropped beneath the realized price, now at $2,058, leading to a MVRV ratio of 0.93, which reflects a 7% network-wide unrealized loss.

Historically, when prices drop below the realized price, it often signals capitulation zones. With the recent activity from dormant ETH whales, this trend appears to be in motion. The immediate support for ETH is identified at $1,592; if the price breaks below this level, an estimated amount of ETH could fall into loss,