Ethereum's Bearish Signal: ICO Whale Selling and Market Structure Deterioration

Ethereum's market dynamics in late 2025 reveal a troubling divergence between institutional and retail behavior, with on-chain metrics and sentiment analysis painting a bearish picture. While Ethereum's Q3 outperformance against Bitcoin and its deflationary model initially suggested resilience, deeper analysis of whale activity, ETF flows, and miner profitability indicates a structural weakening that could prolong the bearish trend.

Whale Selling and Accumulation Divergence

Whale selling has become a defining feature of Ethereum's 2025 market structure. According to on-chain analysis, entities holding over 10,000 ETH or BTC have engaged in sustained distribution over several months, creating downward pressure on prices. This contrasts sharply with smaller holders-wallets with balances below 1,000 BTC-who have consistently accumulated, demonstrating a fragmented market sentiment. The accumulation by mid-sized entities (10–1,000 BTC) has added some resilience, but the dominance of whale selling suggests a lack of conviction in Ethereum's long-term value proposition.

Ethereum ETFs further underscore this trend. Data from Coindesk indicates that roughly 7% of cost-basis capital in Ethereum ETFs was redeemed over the past five weeks, signaling growing caution among investors. While Ethereum's DeFi engagement and governance participation rose in 2024, broader user activity has stagnated, failing to generate the network effects seen in previous bullish cycles. This divergence between whale and retail behavior highlights a market caught between institutional profit-taking and retail optimism, a precarious equilibrium that often precedes trend continuation.

Market Structure Metrics: Mixed Signals

Q3 2025 saw Ethereum outperform Bitcoin, with metrics like the MVRV Z-score and NVT ratio suggesting bullish sentiment. Institutional adoption surged, with Ethereum ETFs attracting $33 billion in inflows compared to Bitcoin's $1.17 billion outflows. However, these metrics mask underlying weaknesses. Ethereum's circulating supply contracted by 9.31% since October 2024, but 22% of its supply is now controlled by whales, raising concerns about liquidity and price manipulation. The deflationary model, supported by a 4.8% staking yield and Dencun/Pectra upgrades, has driven a $223 billion DeFi TVL, yet Bitcoin's regulatory ambiguity and stagnant narrative have not translated into sustained Ethereum demand.

Sentiment Analysis and Behavioral Metrics

Ethereum's on-chain behavioral metrics in 2025 reveal a market in transition. After a price surge post-Pectra upgrade, Ethereum's $2,400–$2,900 range has become a critical battleground, functioning as both resistance and a potential breakout level. Glassnode's NUPL metric indicates a shift from capitulation to belief in Q2, supporting the Q2 price rally. However, long-term holders' profit-taking-evidenced by an 8% increase in liquid supply and a 6% decrease in illiquid supply-suggests a market nearing exhaustion.

ETF flows also highlight Ethereum's vulnerability. While bi-weekly changes in CME open interest accounted for over 50% of Ethereum ETF inflows, Bitcoin's inflows far exceeded futures positioning, indicating Ethereum's reliance on cash-and-carry strategies rather than directional bets. This structural dependency on arbitrage capital weakens Ethereum's ability to sustain price momentum in a risk-off environment.

Miner Profitability and Hash Rate Pressures

Ethereum's miner risk index and hash rate trends in November 2025 further exacerbate bearish signals. Although direct Ethereum data is sparse, Bitcoin's hash rate dropped 6.9% in the week ending November 24, with the 7-day moving average falling to 1,047 EH/s. Bitcoin's hashprice plummeted to $34.21, the lowest in five years, reflecting reduced miner profitability. Given the interconnected nature of the crypto market, Ethereum miners likely face similar challenges, compounded by fluctuating gas fees and declining network demand. The Federal Reserve's rate-cut expectations and broader risk-off sentiment have forced miners to recalibrate strategies, including hardware upgrades or diversification into alternative cryptocurrencies.

Strategic Reserve Accumulation and Validator Exit Queue

Despite these pressures, Ethereum's strategic reserve companies increased their ETH holdings by 50% in August 2025, adding 1.4 million ETH to treasuries. This trend, while positive, contrasts with Bitcoin's declining dominance and may not offset the bearish signals from whale selling and ETF outflows. Meanwhile, Ethereum's validator exit queue hit an all-time high of 993K ETH in August, reflecting consolidation in validator operations and risk management as prices approached all-time highs. Staked ETH remains steady at 29.5% of total supply, but the exit queue's size suggests a lack of confidence in sustained price appreciation.

Conclusion: A Bearish Continuation Scenario

Ethereum's market structure in late 2025 is characterized by whale-driven selling, ETF outflows, and miner struggles, all of which point to a bearish continuation. While institutional adoption and DeFi growth offer temporary resilience, the divergence between whale and retail behavior, coupled with deteriorating miner profitability, creates a high-risk environment. Investors should remain cautious, as the $2,400–$2,900 range may test liquidity and trigger further downward pressure. Until on-chain metrics align with bullish sentiment and ETF flows stabilize, Ethereum's bearish trajectory is likely to persist.