Key Takeaways
Why is Ethereum facing renewed selling pressure?
Trend Research has launched its second ETH sell-off, unloading 102,355 ETH worth $455M since the 1st of October.
Can Ethereum hold its ground despite whale and retail selling?
So far, yes. ETH remains resilient, trading near $4,590. If bulls absorb the sell pressure, ETH could retest $4,673 and aim for $4.8K.
Since the market rebounded, Ethereum [ETH] has slowly responded with moderate gains. In fact, since hitting a low of $3.8k, ETH has traded within an ascending channel, reaching a high of $4619.
As of this writing, Ethereum was trading at $4,590 after moderately rising by 2.03% on the daily charts.
But why is ETH still struggling?
Ethereum whales offload aggressively
AMBCrypto observed that Ethereum has failed to make a significant upswing because of the rising sell pressure, particularly from large players.
After the market recovered, whales jumped right in. In fact, the Spot Average Order Size showed Big Whale Orders for three consecutive days.
Over the past week, Ethereum saw big whale orders for four days out of seven. Often, when the market records whale orders, it signals increased participation from large entities.
Source: CryptoQuant
Surprisingly, these orders are mainly selling ones according to EmberCN. As per the on-chain monitor, Trend Research has turned to aggressive selling, offloading 41,421 ETH worth $189 million on the 5th of October.
Since they started the second round of the ETH sell-off on the 1st of October, they have deposited 102,355 ETH worth $455 million.
Source: EmberCN
As a result of increased selling activity, the altcoin’s Exchange Netflow has remained positive for two consecutive days.
At press time, Netflow was 81.7k ETH, indicating higher inflows, a clear sign of aggressive spot selling.
Source: CryptoQuant
Typically, when large players such as Trend Research turn to aggressive selling, it signals a lack of market conviction, a clear bearish signal.
Retail traders behaving the same
While whales dominated the Spot market, AMBCrypto’s analysis determined that retail traders shifted to the Futures market.
According to CryptoQuant, the Futures Average Order Size showed too many Retail Orders. For two consecutive days, retail has been a dominant player in Futures.
Source: CryptoQuant
Surprisingly, these small-scale players are mostly active on the sell side. As such, Futures Taker CVD data from CryptoQuant pointed towards “Taker Sell Dominant.”
When this metric is red, it suggests that traders are mostly closing their operations, signaling a derisking trend among retailers.
Source: CryptoQuant
Such market behavior signals a lack of confidence in the market, a clear bearish signal.
Can ETH defy all odds?
Despite the rising selling activity from whales and retailers in the Futures market, ETH has remained resilient.
This implies that the selling spree is yet to be felt in the market, suggesting substantial sell pressure absorption.
In fact, Ethereum’s Directional Movement Index (DMI) has surged from 20 to 28 at press time, signaling strengthening upward momentum.
Source: TradingView
At the same time, the altcoin’s Relative Vigor Index (RVGI) hiked to 0.22, further confirming this upward movement.
Typically, when momentum indicators are in such a setup, it signals uptrend continuation potential if conditions remain favorable.
If ETH defies odds and the trend continues, ETH will reclaim $4673 and target $4.8k resistance. A breach of this level will see ETH hit $5k, as resistance above here is insignificant.
However, if sellers, especially whales, overpower the market, ETH will retrace to $4,415 with $4,248 as key support.