Ethereum Plummets 15% as Whale Sells $13.8M, Market Downturn Looms

A significant on-chain event has occurred in the Ethereum market, as a dormant whale has reemerged after a prolonged period of inactivity. This whale transferred 7,000 ETH, valued at approximately $13.8 million, to the cryptocurrency exchange Kraken. This transaction coincided with a sharp decline in the price of ETH, which plummeted to $1,760, marking its lowest level since October 2023.

Despite the subsequent rebound to $1,900, the whale still holds a substantial amount of ETH, totaling 30,070 ETH, valued at around $50 million. The potential for further selling by this whale could exacerbate the downward pressure on ETH's price, leading to deeper corrections in the near term. The broader market downturn and rising liquidations pose additional risks to ETH's recovery.

Over $110 million in ETH long positions were liquidated in the past 24 hours, and negative funding rates on three out of six top exchanges indicate that short-sellers are gaining control. This bearish sentiment is further supported by a spike in 180-day dormant circulation as ETH broke below $2,100, suggesting an increase in long-term holder sell-offs. In a risk-off environment, this aligns with a distribution phase, weighing on ETH's short-term price action.

Ethereum has fallen below its realized price for the first time in two years, meaning the average holder is now at an unrealized loss. Currently trading at $1,917, ETH sits below the realized price of $2,058, pushing its MVRV ratio to 0.93, reflecting a 7% network-wide unrealized loss. Historically, dips below the realized price have signaled capitulation zones, and with dormant ETH whales selling off, this trend seems to be in place.

Immediate support for ETH rests at $1,592. A break below this level could push 4.80 million ETH into loss, potentially opening the door for further downside. Given the current market turbulence, ETH traders should closely monitor exchange inflows and be prepared for potential volatility.