Ethereum (ETH) is under fire as bearish sentiment intensifies. A major red flag was raised when BlockTower Capital, a heavyweight in the crypto venture capital world, offloaded a staggering 9,232 ETH worth approximately $25 million. This massive liquidation, spread across multiple trading platforms including FalconX, Cumberland, Wintermute Trading, and B2C2 Group, has sent shockwaves through the crypto community.
The timing couldn’t be worse as it aligns with a withdrawal of institutional investors. Is this the beginning of the worst for Ethereum? Keep reading to find out.
A Look at Ethereum’s Technicals
Ethereum recently faced resistance at the $2,700 level, signaling potential bearish trends. This rejection occurred near the 78.6% Fibonacci retracement level, reinforcing the bearish sentiment. Additionally, there’s fear of a “death cross,” a technical pattern where the 50-day Exponential Moving Average (EMA) falls below the 200-day EMA.
This is often seen as a strong sell signal, suggesting further downside risks.
Whale Activity Adds to Market Fears
Adding to the concerns, a prominent Ethereum whale has been aggressively selling off large amounts of ETH. This whale, who acquired 1 million ETH during the Ethereum ICO at $0.31 per token, has offloaded 48,500 ETH, worth approximately $154 million, in the past month alone. This selling spree has intensified market fears, especially as it coincides with broader market instability and declining interest in Ether ETFs.
The Plus Token Ponzi Scheme
The fallout from the Plus Token Ponzi scheme continues to affect Ethereum’s market. Recent investigations revealed that significant Ethereum assets linked to the defunct Bidesk exchange have been moved, with some funneled through addresses associated with Plus Token. Last week, $63.1 million worth of Ethereum seized from Plus Token was transferred, coinciding with the whale’s latest sale of 5,000 ETH.
Ethereum Price Analysis
Ethereum’s price hovers around $2,656 after its recent rejection at $2,700. The death cross, combined with a negative Moving Average Convergence Divergence (MACD) reading, suggests further bearish pressure. If Ethereum fails to hold the $2,500 support level, it could trigger a sell-off toward the $2,000 mark.
Rebound Possible, If?
Despite these bearish signals, there’s potential for a rebound. Historically, Ethereum has shown patterns similar to past bull cycles, which could lead to a breakout to new all-time highs in the fourth quarter. If Ethereum can overcome the $2,700 resistance, it might trigger a rapid price increase, potentially leading to a new bullish phase with targets around $3,000 and beyond.
However, the current market sentiment remains cautious, with many traders preparing for further declines.
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What are your thoughts? Can Ethereum overcome its current challenges and recover this September? Share your views.