Ethereum Drops 20% Below $1,500, Whales Accumulate at $1,290 Support

Ethereum's price has recently fallen below $1,500 for the first time since March 2023, leading to a surge in selling activity as many traders opted to cut their losses. This decline has raised concerns about the cryptocurrency's future trajectory, with a key whale metric suggesting that Ethereum may drop to the next support level of $1,290 before making a significant rebound.

Data from CryptoQuant indicates that most Ethereum holders, excluding whales, have been sitting on massive losses since the price plunged below $2,200. This level marks the average cost basis at which most traders purchased Ethereum. In contrast, the realized price of whales holding more than 100,000 ETH is much lower, at $1,290. As Ethereum struggles at multi-year lows and shows signs of further decline, whales may begin to sell their holdings to minimize losses, making it likely for ETH to drop and find support at $1,290.

Historical data supports this analysis. In 2022, during the Terra Luna collapse, Ethereum's price dropped to test support at $870 before making a strong rebound. However, current on-chain data indicates that whales remain bullish, quickly accumulating during the recent dip. According to SpotOnChain, Ethereum’s drop below $1,700 led to two major whale addresses buying 30,000 ETH valued at more than $49 million.

Despite the current challenges, analysts remain optimistic about Ethereum's future. One analyst noted that after the recent crash, Ethereum is mimicking the March 2020 market crash, which saw the price forming a local bottom. Trader Crypto General shared a similar prediction, suggesting that if Ethereum defends the support level at $1,500, it will enter into consolidation before experiencing a significant price increase.

The derivatives market also shows a bullish outlook for Ethereum. The liquidation heatmap with a seven-day lookback period indicates that ETH has wiped out all the long positions after the recent crypto market crash, removing the risk of further dips due to forced selling. There is a hot liquidation zone above the price at $1,837, which might act as a magnet, pushing ETH higher. This price level is also where many short positions on Ethereum will be liquidated if the altcoin rallies higher, increasing buy-side pressure and sparking notable price gains.

In summary, while Ethereum's price may drop to find support at $1,290, derivatives data and analysts' predictions indicate that it is poised for a strong rebound. The current market conditions suggest that Ethereum has the potential to reclaim levels above $2,000, making it an attractive investment opportunity for those willing to weather the short-term volatility.