Ethereum Price Forecast: Whales Buy the Dip Amid Rising Short Bets

Ethereum (ETH) has fallen below $2,000, reflecting ongoing bearish pressure and rising short positions in the market. The price has seen a rejection around $2,100, with support potentially forming at $1,740. This decline has been accompanied by significant liquidations, with $61.9 million wiped out over the past 24 hours.

Whales have been accumulating Ethereum in recent days, with more than 520K ETH added to large wallets between February 4 and 8. This activity has partially offset distribution from retail investors, who sold 233K ETH during the same period. Historically, such buying from large holders has coincided with price recoveries.

Meanwhile, short positions are building up. ETH Net Taker Volume on Binance has turned negative again after briefly turning positive in January, a sign that shorts are increasing their exposure. This suggests that market participants are preparing for further downward movement.

Why Did This Happen?

Ethereum's recent decline has been driven by a combination of factors. Large-scale selling by key figures like Vitalik Buterin and Stani Kulechov has added to market pessimism. In the past three days, Buterin sold 6,183 ETH at an average price of $2,140, raising questions about market sentiment. However, he has stated these sales are part of a multi-year funding plan for open-source projects and are not indicative of a loss of faith in Ethereum.

Retail investors have also been active in the distribution of Ethereum. Wallets holding between 100–1K ETH and 1K–10K ETH collectively sold 233K ETH in the same period that whales were buying. This has contributed to the fragile nature of the market, as retail selling pressure continues to weigh on prices.

How Did Markets React?

The ETH price has seen a sharp decline over the past week, with Ethereum breaching key support levels. The rejection at $2,100 and the drop below $2,000 has triggered a wave of forced selling from leveraged positions. Over $334 million in liquidations have been recorded in recent days, with long liquidations accounting for the majority of the losses.

On the US market, the Coinbase Premium Index has continued to trend downward, hitting -0.21, its lowest level since December 2024. This indicates ongoing selling pressure from US investors, who are still cautious about Ethereum's near-term prospects.

What Are Analysts Watching Next?

Market participants are closely monitoring several key metrics to gauge the likelihood of a rebound. The ETH price needs to reclaim the $2,150 resistance level to stabilize. If it fails to do so and continues to trade below $1,990, the rebound will weaken further. On the downside, the $1,750 Fibonacci support level is now in focus, with a potential drop to $1,500 if this level is breached.

On-chain data also point to mixed signals. While short-term traders are buying the dip, long-term holders are still selling. The net position change for investors holding Ethereum for more than 155 days has increased by about 80% in just four days, showing continued lack of conviction at current price levels.

Ethereum's RSI and Stochastic Oscillator remain in oversold territory, indicating that bearish momentum is still dominant. A reversal in these indicators could signal a turning point for the market, but for now, the outlook remains bearish.

The broader crypto market has also been under pressure, with ETF outflows and macroeconomic headwinds adding to the bearish sentiment. US spot Ethereum ETFs have recorded about $2.5 billion in outflows over the past four months, compounding the sell-off.

In conclusion, Ethereum's price remains under pressure as short positions grow and retail selling continues. While whales have stepped in to buy the dip, the overall market environment remains fragile. Investors are watching for a sustained move above $2,100 to determine whether a meaningful recovery is possible.