Ethereum (ETH) has seen a significant drop in value recently. As of Thursday, August 29, ETH is trading at around $2,550, marking a decline of over 24% in the past 30 days. This sharp drop has unsettled investors, given ETH’s prominent role in the crypto market, with a fully diluted valuation of $306 billion and a daily average trading volume of about $17 billion.
Spot On Chain, a leading blockchain analytics platform, has identified four main factors behind the recent ETH price slump. Their data shows that major entities, including the Ethereum Foundation, Jump Trading, and two significant whales, have sold approximately 197.8K ETH, worth around $599 million, contributing to the market volatility.
Notably, on August 23, the Ethereum Foundation contributed 35K ETH, or $93.8 million, to the Kraken exchange. This action followed a 9% decline in ETH prices over the next five days, emphasizing the Foundation’s potential impact on market dynamics. Notwithstanding these sales, the Foundation still possesses a substantial 275K Ethereum, valued at $677 million.
Additionally, Jump Trading has significantly impacted Ethereum’s recent price movements. Between July 25 and August 6, Jump Trading made a network deposit of 88.9K Ethereum, or $276 million, in response to various consolidated changes. On August 5, this activity caused a sharp 20% decline in ETH prices.
However, The market downturn is exacerbated by an ICO-linked whale identified as “0xе17.” Since July 9, this entity has deposited large amounts of ETH into exchanges, including 48.5K ETH, worth $154 million, into OKX. Of this, 38.5K ETH was deposited in the month leading to the significant price drop on August 5.
Ethereum Price Affected By Whale Activity
Additionally, the whale deposited 10K ETH just before the second notable price decline on Wednesday, August 28. Despite these sales, the whale still holds a significant 303K ETH, which is valued at $751 million.
Another significant factor in the ETH price decline is the “diamond-hand” whale identified as “0x682.” This whale deposited 25,000 ETH, valued at $73.9 million, into the Kraken exchange on two separate occasions. Both deposits preceded notable price drops. The first sale of 10,000 ETH on July 25 led to a 7.6% price decline, and the second sale of 15,000 ETH on August 20 resulted in a 2.5% drop.
Despite Federal Reserve Chair Jerome Powell’s dovish stance, recent data shows a decline in institutional interest in Ethereum. This waning demand and other market factors have led analysts to predict a continued downward trajectory for ETH’s price in September.
Renowned trader Peter Brandt has emphasized the importance of Ethereum’s $2,814 support/resistance level. However, he notes that if ETH fails to close above this level consistently, it might face additional downward pressure, which could potentially lead to a price decline towards $2,000.
From a technical perspective, ETH needs to reclaim the weekly 50 Moving Average (MA) as a support level. Additionally, the Relative Strength Index (RSI) should rise above 50. This would help reduce the risk of a more significant price correction in the coming weeks. However, Maintaining these levels is crucial for ETH’s price stability.
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Furthermore, the author’s views are for reference only and shall not constitute investment advice. Before purchasing, please ensure you fully understand and assess the products and associated risks.
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