Ethereum’s price is down, and the ETH price has shed 35% in two months. Even so, one ETH whale is actively buying. Is this the bottom?
There is a storm in Ethereum.
At spot rates, Ethereum is shaky, shedding nearly 5% in the past week. Although the coin is stable, according to Coingecko, it remains within a bearish formation.
Ethereum Price Slips 35% In 2 Months: Why Is This Smart Whale Buying?
To put the numbers in perspective, the second most valuable coin is down nearly 35% from July highs, slipping below $2,400 at press time.
If things remain as they are, ETH could continue trickling lower, even dropping below the local support at $2,100.
(ETHUSDT)
Fast-falling crypto prices continue to impact sentiment, explaining the general fear among traders negatively.
However, as ETH drops, one savvy investor is taking advantage of the low prices to profit from the dips.
Lookonchain says one whale investor has been doubling down on the dip, buying 5,000 ETH for roughly $11.46 million in the past two days.
The move is worth watching.
In the last dip, when Ethereum prices plunged below $1,000 at the depth of the 2022 bear run, the same address timed the low, buying 5,200 ETH at around $1,322 in November 2022.
When prices nearly doubled in January this year, reaching $2,093, the trader sold, raking in more than $4 million.
(Source)
Whether ETH has found support and prices are bottoming up remains to be seen.
Technically, once ETH bulls push the coin above $2,800 and even the $3,000 round number, more opportunities could be considered.
The stronger the breakout would be if the leg up is with rising volume.
Before then, fundamentals are weak.
Here’s 2 Possible Reasons Why ETH Is Falling
For instance, falling gas fees explain why investors question Ethereum’s sustainability.
With gas at a near four-year low, some argue that validators would be disincentivized to secure the network.
Since the implementation of the Dencun Upgrade in March, gas fees have been falling primarily due to the now near-zero transaction costs on Arbitrum, OP Mainnet, and other Ethereum layer-2s.
Usually, ETH prices tend to rise whenever gas fees spike–translating to higher revenue for validators.
Low fees make Ethereum layer-2s more preferable, reducing the incentive to use the mainnet and the number of ETH burned.
But at some point the power is with L2 not L1
ie say its at say 1bn to L2 and L1 is getting then 4.4m
The L2 effectively has the power and all the value from a valuation perspective and then can abandon the L1 if they see it not required especially for consumer apps
Now im not…
— Kun (@0x_Kun) September 3, 2024
Subsequently, ETH becomes more inflationary due to the rising supply watering down the “ultrasound” narrative.
Additionally, inflows from spot Ethereum ETFs remain mute and below expectations.
Outflows have exceeded $568 million since the product was launched in the United States.
(Source)
The absence of demand from institutions is pressuring prices, deflating upward momentum.
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Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.
