A recent whale dump has fueled fear, but a deeper pullback may signal a potential market bottom.
- Ethereum whale has instilled fear among stakeholders following the release of approximately 19K ETH. However, a deeper pullback may still be on the horizon.
Ethereum [ETH] experienced a major shock when a prominent ICO Ethereum whale sold 19,000 tokens – over $47.5 million – within just two days, sending ripples through the market.
Despite starting October with consecutive red candlesticks on the daily chart, which kept ETH from reaching $2.7K, the expected downward pressure from the whale’s activity didn’t materialize.
Instead, ETH surged approximately 2% from the previous day, capturing AMBCrypto’s attention.
Ethereum whale activity signals a market top
The chart below revealed an intriguing development. Typically, a significant spike in net outflows signals active buying, indicating traders’ confidence in a potential price correction.
Over the past three days, ETH netflows have stayed negative, hinting at growing optimism.
Source : CryptoQuant
However, this optimism contrasts sharply with the recent Ethereum whale activity, which signals $2.6K – the price at which the sell-off occurred – as a potential market top.
If that’s the case, a retracement from $2.37K, ETH’s current price, back to $2.23K, its earlier rejection level, might follow suit.
Additionally, the chart has another side. Traders who purchased ETH in the past three days when it opened at $2.6K, anticipating a bull cycle, now find themselves in a net loss.
Source : IntoTheBlock
This situation highlights the influence of recent Ethereum whale activity, which has driven many investors into unfavorable positions.
Consequently, this widespread loss among traders could further diminish the likelihood of a market reversal, as confidence wanes in the face of substantial selling pressure.
Fear might trigger panic selling
Clearly, the Ethereum whale had a significant impact on ETH price action. This has also affected investor confidence in a future recovery, as evidenced by the chart below.
Ethereum exchange reserves have seen a sudden spike, with approximately 18.7 million ETH being deposited into exchanges.
Source : CryptoQuant
This increase is a direct reflection of the fear gripping stakeholders following the Ethereum whale sell-off of 19,000 ETH.
Generally, extreme fear is necessary for an optimal “dip” buying opportunity. The minor 2% surge mentioned earlier, despite the significant sell-off, might indicate just that.
According to AMBCrypto, a more aggressive buyout could reverse the current trend by absorbing the selling pressure caused by the Ethereum whale. If this happens, it might set the stage for a market bottom, attracting buyers looking for lower prices.
However, for this reversal to work, there needs to be extreme fear among investors. Without that fear, the chances of a lasting recovery diminishes.
Therefore, in addition to the Ethereum whale influence, ETH may face a deeper pullback before a significant rally occurs.
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