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Ethereum (ETH) has been in the bearish zone for the past few days even with whale accumulation still being observed. ETH declined by almost 9% on August 28, and at the time of writing, one ETH is trading at $2,464.
This pullback happens as whales are still buying Ether at a particularly large scale with about 200k ETH that is equivalent to over $540 million acquired. But the shadow of these acquisitions has been cast by selling pressure among other whales and the relatively disappointing performance of recently launched spot Ether ETFs in the US, raising concerns over Ethereum's short-term outlook.
Recent days have seen a lot of interest in whales purchasing large volumes of ETH, even as the price drops by more than 8%, giving a few questions on the sentiment in the market. On-chain data is showing that a lot of whales are currently taking profits, which could come from fearing future drops in price.
Of note, many whales have been seen shifting massive amounts of their ETH into exchanges, presumably for selling. A single whale withdrew 5,088 ETH from Binance when it was trading at $3,389 then offloaded all their holdings for $13.58 million, realizing a total loss of $3.66 million.
More specifically, two other whales who were looking at liquidation on the Aave platform dumped a total of 8,208 ETH valued at $21.59 million. Another whale requested to unstake 30,000 ETH and went ahead to deposit 19,000 ETH valued at $49.17 million in Binance for a potential sale. This means big investors are worried about volatility on the market next week
The launch of spot Ether ETFs in the U.S., which many predicted would boost the price, has not yet lived up to expectations. Combined, the nine ETFs have witnessed net withdrawals of close to $500 million, which underlines a lack of interest from institutional investors. This has led to the current underperformance and has also added bearish pressure to the price decline.
Subsequently, the downward trend in ETF flows has continued for the eighth day in a row with no real inflows being observed. Grayscale’s ETHE, Fidelity’s FETH, and Franklin’s EZET have all reported net outflows, which increased fears over Ethereum’s near-term outlook.
The continuous unloading by ETF investors reflects the overall market sentiment when both institutional and retail investors appear to be tapering their ETH positions.
There are quite a few technical indicators that call for further downfall in Ethereum in the short term. Concurrently, the formation of the "death cross" on the daily chart, where the 50-day moving average has moved below the 200-day moving average. This is quite a bearish signal, given that it gives one an indication that the downside momentum could continue.
Another key resistance level that ETH has to overcome to continue rising and attempt to find a potential reversal is around $2,700. However, the RSI on the daily time frame has recently made an attempt to break above the 50 level, after which it got rejected, showing that sellers are still in control.
However, with current indicators leaning on the bearish side of the chart, it may be difficult to break through this level in the short term. The Awesome Oscillator (AO) has also been painting smaller green bars below the zero line, which points to dwindling bullish pressure.
