Ethereum’s 13% Price Drop: What’s Happening in the Market?
Ethereum (ETH), a leading cryptocurrency, has experienced a 13% dip in just two days, leaving investors questioning the direction of the market. Despite the bearish trend, whale investors have taken advantage of the lower prices, accumulating $360 million worth of ETH. But the question remains: why are other key players, including smart money investors, hesitant?
Price Analysis: Key Trends on the Ethereum Chart
Currently, Ethereum’s price is testing the lower boundary of a symmetrical triangle on the daily chart. Earlier this month, sellers pushed the price down from the upper boundary, but new momentum indicators suggest a potential reversal.
Between November and January, while Ethereum’s price formed lower lows, the Relative Strength Index (RSI) printed higher lows—showing a bullish divergence. This is an important signal, as RSI measures momentum by comparing recent gains and losses. Historically, such divergences have led to price recoveries, as they indicate weakening selling pressure.
Resistance Levels in Focus
The resistance area between $3,146 and $3,164 represents a significant hurdle for Ethereum’s upward movement. According to cost basis data, roughly 3.44 million ETH was accumulated in this range, making it a likely sell-off zone. Any rebound in price will need to clear this area for a stronger bullish trend to emerge.
Looking at the upside, Ethereum needs to reclaim the $3,050 support level on the daily chart to stabilize. A confirmed breakout past $3,160 would mark a key turning point, potentially opening the path to $3,390—a level that could initiate a broader bullish reversal.
Whale Buying: A Sign of Confidence?
As retail traders hesitate, whale investors appear more optimistic. During the recent dip, ETH whale holdings rose by nearly 290,000 ETH, representing close to $360 million in value. This is not the first time whales have accumulated near significant support levels. Similar buying behavior was observed earlier in January, shortly before Ethereum saw a temporary bounce.
Why Is Smart Money Holding Back?
Unlike whales, smart money—typically known for early and aggressive market positioning—is waiting for Ethereum to clear major resistance levels. The smart money index remains below its signal line, showing a lack of confidence in the reversal. Historically, ETH saw gains of 20-25% when the smart money index spiked above the signal line. However, for now, this momentum signal remains absent.
What Should Investors Watch Next?
Investors should keep an eye on the $3,050 and $3,160 levels. These are critical for signaling whether Ethereum can sustain a recovery. On the downside, losing support near $2,910 could lead to further declines, with $2,610 as the next major bearish target.
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Final Thoughts
The Ethereum market is at a crossroads. While whales signal confidence by accumulating during the dip, it’s worth waiting for clear signs of strength before making significant moves. With momentum indicators hinting at a potential reversal, this could be an opportunity for strategic investments—but only time will tell if ETH can break through its resistance zones and sustain its recovery.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Be sure to conduct your own research and consult with a financial professional before making any investment decisions.
