Tests Critical Support While Whale Profit Ratios Return to Bear Market Levels

TLDR

• Major Ethereum whale from Genesis Trading sold 40,000 ETH worth $89.9 million in two days
• ETH price dropped to around $2,000, declining 13% in one week
• Weekly RSI at lowest level since May 2022, suggesting possible further decline
• Exchange deposits increased by 60,000 ETH in two weeks, indicating selling pressure
• Analysts draw parallels to 2019 ETH behavior during Federal Reserve tightening

The Ethereum market has faced mounting pressure in recent weeks, with prices hovering near the critical $2,000 level amidst increased selling activity from large holders. Data indicates that major players in the market are reducing their positions while technical indicators point to potential continued weakness.

A prominent Ethereum whale that received compensation during the Genesis Trading liquidation in August 2024 has sold 40,000 ETH worth approximately $89.9 million through over-the-counter trades within just two days. According to information from Arkham Intelligence, this address had received 114,500 ETH valued at $358.19 million during the liquidation process but has now sold nearly 30% of these holdings.

The timing of this large sale coincides with Ethereum’s price falling more than 13% over a one-week period. This downward movement has raised concerns about price stability in the near term as other market indicators also flash warning signs.

Data from CryptoQuant reveals that the unrealized profit ratio among Ethereum whales has dropped to levels not seen since the previous bear market. This metric measures the profit status of current ETH holdings. Despite Ethereum’s price being roughly twice as high as during the bear market, many whale positions are now yielding similar profit levels as before.

Particularly concerning is that the whale cohort holding between 1,000 and 10,000 ETH has reverted to a negative unrealized profit ratio. This suggests these large holders are currently underwater on their investments, which could motivate further selling if prices continue to decline.

Exchange deposit metrics further support the bearish outlook. On-chain data shows that over the last two weeks, investors have moved more than 60,000 ETH to exchanges. Such movements typically suggest preparation for selling, as cryptocurrencies need to be on exchanges to be converted to other assets or fiat currencies.

The weekly Relative Strength Index (RSI) for Ethereum has fallen to 35.87, its lowest reading since May 2022. Crypto analyst Jesse Olson pointed out that in May 2022, when the RSI reached similar levels, ETH subsequently dropped another 60%. If history were to repeat itself, Ethereum could potentially fall from $2,000 to around $800.

JUST IN: #Ethereum‘s weekly RSI is at its lowest (35.87) since May 2022, during a bear market. The bottom wasn’t reached then, and the price dropped another -60%. 👀 pic.twitter.com/8DYFsNYrsn

— Jesse Olson (@JesseOlson) March 4, 2025

Adding to market concerns, US President Donald Trump’s trade tariffs on Canada and Mexico took effect recently, fueling fears of an economic recession. According to data from Kalshi, there is a 39% probability of a recession occurring in 2025. These macroeconomic developments have placed additional pressure on the broader cryptocurrency market.

The total crypto market capitalization has declined from $3.7 trillion on December 14 to $2.8 trillion at present. Major cryptocurrencies have felt this impact, with Bitcoin down 7.1% and Ethereum down 8.9% in a 24-hour period.

Unlike Bitcoin, which saw a remarkable 2024 with multiple new all-time highs, Ethereum has struggled since reaching its peak of $4,878 in November 2021. Over the past year, ETH has declined by 41.6%, while Bitcoin has risen by 26%.

Crypto analyst Benjamin Cowen has drawn parallels between current ETH price action and its performance during the previous Federal Reserve monetary tightening cycle. According to Cowen, Ethereum is repeating its 2019 behavior during the Fed’s quantitative tightening phase.

In 2019, ETH formed a wedge pattern under similar monetary conditions and remained in the same structure for almost a year. A brief breakout above the wedge preceded a sharp decline below it. This pattern coincided with the Fed’s policy changes and marked a bottom for the ETH/BTC pair, followed by a rally in ETH/USD, though the price later dipped deeper.

Cowen notes that this cycle appears to be unfolding similarly, with the main difference being the extended duration of quantitative tightening in the current cycle. Presently, the ETH price has broken down from its wedge pattern into its regression band. The analyst suggests there are “decent odds” that the Fed could end quantitative tightening within the next few months, which could provide relief for the cryptocurrency.

Despite the negative market sentiment, some analysts remain optimistic. One crypto analyst emphasized that Ethereum is currently retesting the 21-Day EMA on the 3-Month chart, a level that ETH has never closed a candle beneath. This suggests that either we are about to witness a historic breakdown or that Ethereum is very close to finding its bottom.

For everyone panicking about $ETH right now…#Ethereum is currently retesting the 21-Day EMA on the 3-Month chart.$ETH has NEVER closed a candle beneath this level.

We are either about to witness history or we are very close to bottoming…

Be VERY CAREFUL Panic Selling! pic.twitter.com/aTi1fxpOP9

— Crypto – Now or Never (@CryptoNowNever) March 4, 2025

Technical Anyalsis

Recent analysis also found that ETH exchange balances have dropped to a 9-year low. This declining supply on exchanges could potentially strengthen the digital asset’s scarcity narrative and provide support for prices in the long term.

As of the most recent data, ETH is trading at approximately $2,126, representing an 8.9% decline in a 24-hour period. The cryptocurrency’s open interest has increased by 2.62% to $19.23 billion, suggesting active trading and positioning around current price levels.

Market participants are closely watching the crucial $2,000 support level. If Ethereum’s price drops below this psychological threshold, technical analysts suggest it could accelerate the downward movement toward lower support levels.

For now, the second-largest cryptocurrency remains in a precarious position as whale selling activity, technical indicators, and macroeconomic concerns all contribute to bearish market sentiment. However, historical patterns and exchange supply dynamics leave room for a potential reversal if market conditions improve.

The current Ethereum price represents a 56% decline from its all-time high, putting the cryptocurrency in a challenging position as it navigates both internal market dynamics and external economic pressures.