Ethereum (ETH) Price Prediction: Whales Dump 760,000 ETH, Causing Price to Plunge Below 20-day EMA

Ethereum is facing mounting challenges as on-chain data reveals significant selling pressure from whales, a sharp decline in its relative strength against Bitcoin

The post Ethereum Faces Triple Threat As Whales Sell, BTC Dominance Grows, And DeFi Share Shrinks appeared first on Chain Link.

Relative strength indicator now stands at 40.73.gradient of the line suggests increasing selling pressure.

After a stellar performance throughout 2023, fueled by anticipation for the highly touted "Ethereum narrative," the second-largest cryptocurrency, Ethereum (ETH), now faces pressing challenges that threaten its underwhelming price performance in 2024.

At the current price point of $1,880, the cryptocurrency is facing difficulties in breaking above the 20-day Exponential Moving Average (EMA), suggesting a continuation of bearish momentum.

Multiple limiting factors have contributed to this underwhelming performance, contrasting sharply with Bitcoin’s resilience.

Whales Are Selling

According to crypto analyst Ali Martinez, large Ethereum holders have sold approximately 760,000 ETH in the last two weeks.

"Interesting stat: Whales have sold 760,000 #Ethereum $ETH in the last two weeks!

"The number of large ETH transactions has fallen by 63.8% since February 25, 2024, signaling a drop in activity on the network."

This move has likely contributed to the recent price weakness as the crypto behemoths are exiting the market.

However, the reduction in the number of large transactions is more concerning. Since February 25, there has been a 63.8% decline in the number of large ETH transactions, signaling a substantial drop in whale activity.

This slowdown suggests that institutional players and major investors are either exiting the market or choosing to stay on the sidelines, which bodes poorly for liquidity, market confidence, and price support for ETH in the near term.

If whales continue to offload ETH at this rate, Ethereum may struggle to regain bullish momentum.

ETH/BTC Ratio Hits a 3-Year Low

Furthermore, the ETH/BTC ratio has dropped to 0.022, its lowest level since December 2020. This also marks a 73% decline from its 0.085 peak in September 2022.

At a current price of $1,880, Ethereum is down 9% over the past week and 62% from its all-time high of $4,890 in November 2021.

In contrast, Bitcoin has remained more resilient, trading at around $84,300, with only a 10% decline year-to-date (YTD). Meanwhile, Ethereum has plunged 46% YTD, indicating that investor confidence in ETH is waning.

The decrease in the ETH/BTC ratio highlights the shifting dynamics in the crypto market, with Bitcoin managing to retain value despite the YTD price weakness, while Ethereum faces steeper losses and growing difficulties.

This disparity might be attributed to the narrative surrounding both crypto behemoths. Bitcoin, often viewed as a safe-haven asset due to its resilience and first-mover advantage, seems to be attracting more liquidity and institutional interest.

On the other hand, Ethereum, which is largely hyped for its role in DeFi and Web3, appears to be losing steam as investors seek out alternatives or prefer to stay liquidated.

This shift in narrative and liquidity flows might be pushing the ETH/BTC ratio to new lows, indicating a potential preference for Bitcoin over Ethereum among institutional and large-scale investors.

This shift in liquidity and narrative could have implications for the YTD performance of both crypto behemoths.

Finally, Ethereum’s dominance in the total value locked (TVL) of DeFi protocols has also seen a notable decline.

As of press time, Ethereum’s TVL stands at $50.68 billion, accounting for 52.76% of the total DeFi market. However, this represents a decline from its 61.64% share in February 2024.

One of the biggest beneficiaries of this shift has seen Solana's TVL increase from 2.84% to 7.24%, bringing its total to $6.69 billion–a more than 2.5x increase in just over a year.

The rise of competing ecosystems like Solana underscores the growing demand for more efficient, lower-cost alternatives to Ethereum.

As investors and liquidity providers seek out new opportunities, the landscape of DeFi is evolving, presenting both challenges and possibilities for Ethereum to maintain its leading position.