Ethereum Plunges to $2,000 as Whales Dump Holdings Despite Strategic Reserves

Ethereum's price has plummeted to $2,000, its lowest level since November, as whales unload their holdings despite the cryptocurrency's inclusion in strategic reserves. This 15% drop has erased all post-election gains and raised concerns about a potential crash to $1,900.

The sell-off has been driven by elevated sell-side liquidity and extreme market fear, making it challenging for bulls to defend key levels. If the current trend continues, a drop to $1,900 is increasingly likely. However, the 15% decline has pushed prices into a key demand zone, presenting a potential accumulation opportunity for those seeking discounted entries.

On-chain metrics suggest weak buyer interest, with the Coinbase Premium Index remaining negative and Ethereum exchange reserves rising. A 5.50% drop in trading volume also points to sustained sell pressure. Without a shift in conditions or a demand-supply equilibrium triggering consolidation, a drop to $1,900 remains the likely scenario.

Ethereum's sell-off has intensified, with $168.13 million in long liquidations triggered and a surge in sell-side liquidity. This rapid de-leveraging has intensified market volatility as futures traders aggressively closed positions to mitigate losses or secure gains. With market liquidity thinning and sell-offs intensifying, Ethereum remains vulnerable to further declines unless demand steps in to trigger a supply shock.

Broader market sentiment plays a crucial role in Ethereum's price action. If Bitcoin's "dip" attracts strong accumulation, Ethereum could stabilize. However, with extreme fear, ongoing de-leveraging, and weak bid-side liquidity, a drop to $1,900 appears increasingly probable.