Ethereum has recently encountered resistance at key price levels, prompting some large holders, known as "whales," to sell off parts of their holdings. Despite these sell-offs, the overall decline in ETH exchange reserves continues unabated.
Recent data from Lookonchain highlighted a notable move by an Ethereum whale, who sold 6,900 ETH, valued at approximately $17.87 million. This marks a significant behavioral shift for the whale, who had been in an accumulation phase from January to May, amassing 65,000 ETH worth over $196 million. However, since July, this whale has begun selling, offloading over 21,000 ETH.
Despite this substantial sell-off, the netflow metric for Ethereum on CryptoQuant does not show a clear dominance of inflows to exchanges—a typical indicator of increasing selling pressure. Instead, the data reveals a balanced netflow, suggesting there hasn't been a significant spike in either inflow or outflow activity.
This balance indicates that while some large holders, such as this whale, are selling, there are also considerable withdrawals from exchanges. The absence of a dominant flow direction points to a relatively stable market environment, where short-term selling by some is offset by accumulation or holding by others.
Ethereum Reserves Continue to Decline
An analysis of Ethereum’s exchange reserves shows that the recent sell-off had little effect on halting its overall decline. Data indicates that after a brief rise to approximately 18.6 million ETH on August 27, reserves fell again to 18.5 million ETH. This continued decline suggests a significant amount of Ethereum is still being withdrawn from exchanges.
The ongoing decrease in exchange reserves is generally seen as a bullish signal, indicating that the supply of ETH available for immediate trading is shrinking. If demand remains stable or increases, this reduced supply could support higher prices or at least help stabilize the market.
ETH Remains Bearish
At the time of writing, Ethereum was trading at around $2,512, following an approximate 1% decline. An analysis of its Moving Average Convergence Divergence (MACD) and Relative Strength Index (RSI) indicates that Ethereum is currently in a bearish trend.
The RSI remains below 40, signaling a strong bearish phase. Meanwhile, the MACD's signal lines are below zero, although the histogram of the MACD is above zero, which sometimes suggests a potential shift in momentum. However, the position of the signal lines still indicates that the bears maintain some control.
As Ethereum faces these dynamics, the question remains: Is it time for investors to worry, or is this just another phase in the market's ebb and flow?
