Ethereum Faces Correction as Whales Withdraw: What’s Next for ETH?

In the wake of Bitcoin’s all-time high, Ethereum faces potential price corrections as large investors begin to pull out. After peaking at $2,731, ETH struggles with low buying demand and recent liquidation of significant positions. Despite a booming DeFi sector, concerns mount about ETH’s short-term price stability, with key support levels being closely monitored.

In recent days, the crypto landscape has seen notable movements, particularly with Bitcoin achieving a new all-time high. However, this surge prompted profit-taking behaviour, leading to a peak in market activity. Ethereum is feeling the effects of this trend, as significant investors, often referred to as whales, have begun withdrawing their investments. Short-term fluctuations could mean ETH might face a correction soon.

Ethereum’s price recently spiked to an eight-week high of $2,731, largely fuelled by a market-wide recovery spurred by Bitcoin. Still, it struggles to maintain demand, as many investors have opted to cash in on their earnings. According to data from Coinglass, approximately $40.66 million in Ethereum holdings were liquidated within a 24-hour period, which included $15.12 million from buyers and $25.54 million from sellers. This, alongside a drastic fall in large transactions—from $12.24 billion down to $3.28 billion in just three days—indicates that larger investors have stepped back, which might lead to downward pressure on ETH prices.

Despite the price concerns, there’s good news for Ethereum’s decentralised finance (DeFi) sector. The total value locked (TVL) in the Ethereum ecosystem increased from $50.63 billion to $62.7 billion in less than a month—a significant rise of over 25%. Platforms like Pendle recorded impressive deposit surges exceeding 50%, while Ether.fi and EigenLayer also observed healthy growth at 48% each. Ethereum consistently holds the lead in TVL across blockchains, claiming 54% of the market; in stark contrast, Solana and BNB Chain account for just 8% and 5%, respectively. This ongoing growth within DeFi might provide the needed support for ETH’s price and could cushion against a substantial fall.

Looking ahead, Ethereum’s price dynamics are critical. After hitting resistance at $2,731, ETH lost traction and fell below crucial Fibonacci retracement levels. As selling pressures mount, buyers find it increasingly difficult to initiate a recovery. At the time of writing, Ethereum is trading around $2,535, a slight decrease of 0.6% over the past day. The ETH/USDT could potentially decline to the 100-day exponential moving average (EMA) support level near $2,456. A rebound from this level might create opportunities for buyers to target a rise above $2,750, potentially reaching near $3,000, although resistance levels, especially around $2,870, could pose challenges.

In contrast, falling below the 100-day EMA would likely alter the optimistic prospect for ETH. Should this happen, the price could dip towards the descending trend line at about $2,329. With the price hovering below critical midline indicators, the chance of a bearish correction for Ethereum remains a real concern.