- Ethereum (ETH) price dropped by over 4% in 24 hours, reaching a weekly low of $3,683.
- The recent dip resulted in $124M in total ETH liquidations, with $108M being long liquidations.
- Ethereum whales reduced their holdings by 60,000 ETH, valued at over $200M.
- Institutional demand for ETH may be slowing down, with inflows to spot ETFs reaching a low of $2.45 million.
- There is a looming supply zone for ETH at $3,800-$3,900, which could provide strong resistance to an uptrend.
Ethereum Price Analysis
Ethereum’s price has been experiencing a significant downturn, with a 4% drop in 24 hours bringing its weekly losses to 6%. Despite this, the largest altcoin still maintains a 17% monthly gain. The recent dip has resulted in a substantial increase in liquidations, with $124M in total ETH liquidations, of which $108M were long liquidations. This suggests that long buyers are rushing to close their positions, contributing to the downward pressure on the price.
Ethereum Whales’ Activity
Ethereum whales, which account for 57% of the altcoin’s supply, have been reducing their holdings significantly. On December 18, whales holding between 1,000 and 10,000 ETH saw their holdings drop from 13.47M to 13.41M, indicating that they sold 60,000 ETH valued at over $200M. This reduction in holdings could have a negative impact on the price by increasing the sell-side pressure.
Institutional Demand and Exchange Inflows
Institutional demand for ETH has been increasing significantly this month, with inflows to spot ETFs being positive for the last 18 consecutive days. However, on December 18, total inflows reached a low of $2.45 million, the lowest since late November. Additionally, the Grayscale Ethereum Mini Trust saw $15 million in outflows, the first negative flow since November. This slowdown in institutional demand could contribute to a decline in price.
Supply Zone and Resistance
There is a looming supply zone for ETH at $3,800-$3,900, where 2.59M addresses purchased 4.85M ETH. If buyers re-enter the market, the resulting uptrend could face strong resistance at this zone as traders look to book profits. However, if the altcoin pushes past this zone, it could unlock more gains.
Derivatives Market Analysis
Speculative activity around ETH in the derivatives market is still significantly high, with derivative trading volumes surging by around 30% despite a 4% decline in open interest. Ethereum’s open interest at $27 billion is just 6% shy of all-time highs. However, most derivative traders appear to have taken short positions, with the long/short ratio at $0.91, indicating a prevailing bearish sentiment among traders.
Conclusion
Ethereum’s price is facing significant downward pressure due to the reduction in holdings by whales and the slowdown in institutional demand. The looming supply zone at $3,800-$3,900 could provide strong resistance to an uptrend. However, if the altcoin pushes past this zone, it could unlock more gains. The derivatives market analysis suggests that traders are bearish on ETH, but the high open interest and trading volumes indicate that there is still significant speculative activity around the altcoin.
