Ethereum News Today: Ethereum's $3,100 Support Dilemma: Will Whales Stem the Sell-Off?

Ethereum (ETH) plunged 7% on Thursday, with analysts pointing to a surge in profit-taking and loss realization as key drivers of the selloff.

The price dropped to $3,170, teetering near critical support levels as market participants grapple with macroeconomic pressures. Over the past week, investors have booked $500 million in profits and $100 million in losses, signaling a potential shift in sentiment amid a broader crypto market downturn.

The current decline mirrors historical patterns where increased loss realization has triggered heavy distribution. In late January, ETH's price fell over 50% within three months after similar dynamics took hold. With the asset now approaching the realized price of large holders-averaging $2,900 for wallets holding 10K-100K ETH-further selling pressure could intensify if the $3,100 support level breaks. Whale activity has been a mixed signal: while these entities have absorbed 890K ETH in recent weeks, their continued buying could wane if prices slip below their cost basis.

Retail investors and short-term holders have dominated recent selling activity, exacerbating downward momentum. Open interest remains subdued, failing to exceed 12 million ETH since October's leverage-driven sell-off, per Coinglass data. This lack of speculative capital may limit the market's ability to rebound without external catalysts.

The broader crypto landscape remains fragile, with macroeconomic factors such as interest rate uncertainty and regulatory developments casting a shadow over risk assets. Santiment's network realized profit/loss metric underscores the precarious balance between capitulation and accumulation. While whales have historically acted as a buffer during selloffs, their capacity to absorb selling pressure is not infinite, raising concerns about liquidity in a prolonged downturn.