Key Points
- Ethereum (ETH) price drops by over 4% amid increased crypto volatility.
- Ethereum whales are selling off their holdings, contributing to the bearish pressure.
The price of Ethereum (ETH) has seen a significant drop of more than 4% in the past 24 hours.
This drop occurred during the early New York session on Wednesday, August 28, amidst a period of heightened volatility in the crypto market.
The large-cap altcoin, which boasts a fully diluted valuation of about $303 billion and a daily average traded volume of around $22 billion, has experienced a lack of bullish momentum in the past six months.
This is despite the approval of several Ether ETFs in the United States and other jurisdictions.
Bearish Sentiment and Ethereum Whales
The recent daily death-cross between the 50 and 200 Moving Averages (MAs) has signaled a midterm bearish sentiment for the altcoin industry.
Additionally, Bitcoin’s dominance has continued to grow against altcoins, as evidenced by the bearish trend of the ETH/BTC pair.
The approval of several spot Ether ETFs in the United States has gradually turned into a sell-the-news event.
According to recent market data, the US spot Ether ETFs have seen nine consecutive weeks of cash inflows.
The US spot Ether ETFs, led by Grayscale’s ETHE, have recorded a net cash outflow of about $481 million since their official launch.
On Tuesday, these ETFs reported a net cash outflow of about $3.45 million.
On-chain data indicates that several top Ethereum whales have been selling their holdings on different centralized exchanges, with Binance being the leader.
For instance, the Ethereum Foundation, which currently holds 275K ETH worth over $677 million, recently deposited 35K ETHs, worth over $93 million to Kraken.
In the past month, Jump Trading has liquidated over 88.9k Ether, worth more than $276 million, through various exchanges led by Binance and OKX.
Since July 9, an ICO-linked wallet has deposited over 48K Ether, worth over $154 million, to OKX.
Midterm Expectations
Despite the dovish sentiment from Fed Chair Jerome Powell, institutional investors’ demand for Ether has been low recently.
As a result, several analysts, including veteran trader Peter Brandt, believe the ETH price will continue to drop in September.
From a technical standpoint, the ETH price must regain the weekly 50 Moving Average (MA) as a support level, and the Relative Strength Index (RSI) should rally above 50 percent to invalidate possible capitulation in the coming weeks.
