Ethereum (ETH) Price Analysis: Whales Giving Up as ETH/BTC Pair Continues to Underperform

Ethereum's recent spike in margin lending ratio, rising from 38 to 72, reflected a strong wave of borrowing. Many analysts viewed this jump as a potential

is recent price action signaled a potential bearish wave.

The price recently spiked from around $2,000 to highs of $2,300, showing a strong wave of buying pressure. However, this buying was largely fueled by margin loans, with the ratio rising sharply from 38 to 72.

This spike in the margin lending ratio could indicate a potential wave of forced deleveraging in the future. Margin traders borrowing at high interest rates often face the risk of being liquidated if the price drops significantly.

In such cases, their positions are closed forcefully, leading to a rapid sell-off and driving the price lower. This phenomenon is especially relevant in bear markets and could explain the bearish outlook for Ethereum.

Another crucial aspect to consider is the coin’s performance against Bitcoin. In the ETH/BTC pair, traders wanted to see the price rise above 0.0385 BTC for a potential bullish continuation.

However, the price recently fell below the high-timeframe support level from where it had been consolidating. This breakout could indicate further downside pressure on ETH.

Moreover, ETH’s dominance chart also signaled a challenging period. The price recently broke down from a crucial support level, indicating possible further bearish pressure.

This bearish outlook aligns with the recent shift in investor attention toward alts like Solana, as some questioned Ethereum’s potential to outpace Bitcoin in the long term.

To fully grasp the significance of this disparity, it’s essential to compare the long-term performance of both assets. Strikingly, investors who bought and held ETH from its early days still encountered no substantial gains against BTC, the more stable asset.

Despite having a market cap of $305 billion compared to Bitcoin’s $1.35 trillion, the latter consistently maintained lower volatility, making it more attractive to traditional finance investors.

This preference is evident in the crypto space, where many investors ultimately aim to convert gains from alts into Bitcoin, a trend that appears to be weakening.

This year, several Ethereum whales sold off their holdings, with one prominent investor, who had held ETH for over ten months, finally making a move.

This particular whale, known for their large transactions, deposited 8,982 ETH, valued at around $22.93 Million, into OKX. Notably, they sold only a portion of their ETH holdings, netting around $3 Million in gains from an initial investment that, if sold at its peak in March, would have yielded over $16 Million.

This sell-off showcases the challenges faced by Ethereum as it attempts to regain momentum. While some whales sold their holdings at a loss, others, like one who had held ETH for 1,100 days, opted to sell at a profit to capitalize on the rising prices.

Collectively, these whale sell-offs contributed to the bearish sentiment surrounding Ethereum. Despite these setbacks, some positive signs emerged.

For instance, Ethereum’s accumulation wallets increased by 65% this year, indicating that new investors entered the market and maintained their positions. Many investors anticipated the Moving Average Convergence Divergence (MACD) indicator on the weekly chart to turn positive, hinting that momentum could soon shift upward.

Although Ethereum’s short-term trend appeared uncertain, some analysts expected the network’s long-term prospects to improve. However, the market dynamics have shifted drastically this year.

The success of the Bitcoin ETF and the comparatively underwhelming performance of Ethereum’s ETF sparked a crucial development in the crypto market.

Traditional finance investors prioritized Bitcoin due to its potential for stable returns over five to ten years, a strategy that aligns with the priorities of these investors.

This shift in attention placed Ethereum in a more challenging position, as these investors appeared to favor Bitcoin over Ethereum in the long term. As a result, Ethereum faced heightened pressure to maintain investor interest and propel the price upward.