• Whale capitulation and exchange outflows stirred uncertainty over Ethereum’s short-term market direction.
• Bearish technicals, rising NVT, and liquidations pointed to deeper downside risks for ETH.

After selling 10,000 Ethereum [ETH] worth $15.71 million at an average price of $1,571, a long-term whale exited after holding for over 900 days without taking profits.

The investor had accumulated ETH at $1,295 during the 2022 bear market and witnessed its price rally past $4,000. Despite riding multiple market cycles, he chose to exit during the current downturn.

This move reflects growing caution among large holders and adds weight to the prevailing bearish sentiment in the ETH market.

Are exchange reserves flashing a warning sign for Ethereum?

Ethereum’s Exchange Reserve has dropped by 9.03% in the past 24 hours, now totaling $26.63 billion. Typically, lower reserves imply reduced selling pressure as investors transfer assets off centralized platforms.

However, this decline coincides with significant selling activity and whale exits, raising doubts about its bullish implications. Large holders may be moving their assets to decentralized platforms, possibly for leverage or gradual position exits, adding uncertainty.

As a result, the reserve drop should not be viewed as entirely positive but as a potential precursor to strategic sell-offs.

How is price action reacting to whale pressure?

At the time of writing, ETH was trading at $1,474.01, reflecting a sharp 6.12% drop in the past 24 hours.

Notably, Ethereum recently broke below a crucial demand zone near $1,828, making the current price level significant. It is now hovering just above the next major support at $1,392.

Moreover, ETH is trapped within a clear descending channel, forming lower highs and lower lows—a classic bearish pattern.

If the current support fails, further declines may occur rapidly, especially with no strong demand zones directly below.

Is the Ethereum network losing its momentum?

Beyond that, on-chain data paints a troubling picture.

Ethereum’s network growth has declined drastically and sat at just 32.1K at press time, which indicates falling interest from new participants.

Meanwhile, the NVT ratio surged to 133.71, suggesting that Ethereum is becoming overvalued relative to the actual transaction volume on-chain. 

Together, these metrics paint a picture of shrinking utility amidst price volatility. Historically, such divergences between valuation and real usage often precede sharper corrections.

Where are liquidations piling up the most?

Derivative market data highlights the growing importance of liquidation zones. The Binance ETH/USDT liquidation heatmap reveals significant liquidations near $1,500.

When prices pierced this zone, long positions were forcibly closed, causing a cascade effect. Liquidation levels are densely concentrated between $1,500 and $1,600. Any upward price movement may encounter immediate resistance from sellers re-entering the market.

With leverage wiped out and volatility surging, the risk of deeper liquidations remains high. This is particularly true if prices fail to stay above $1,392 in the near term.

Considering all these indicators, the current market conditions point to Ethereum entering a deeper correction phase.

Whale capitulation, declining network growth, a rising NVT ratio, critical support breaks, and liquidation pressure collectively confirm a bearish trend.

Without significant bullish catalysts emerging soon, Ethereum is likely to maintain its downward trajectory.

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