Whales Dumping? Ethereum Plunges at $2,400 Resistance

▲ Ethereum (ETH), decline/AI generated image ©

Ethereum (ETH) is once again wavering below the $2,400 resistance level, pressured by whale movements and a macro risk-off sentiment.

According to cryptocurrency market data aggregator CoinMarketCap, as of May 8 (local time), Ethereum was trading at $2,288.40, down 2.58% over the past 24 hours. Market analysis suggests that Ethereum shows a high correlation of 82.29% with the Russell 2000 index, indicating a strong linkage to the flow of interest-rate-sensitive risk assets.

The direct pressure for the decline stemmed from concerns over large holders depositing funds into exchanges. A whale known as Garrett Jin moved 166,023 ETH, worth approximately $396 million, to Binance, heightening vigilance over potential large-scale selling. Geopolitical tensions combined with the cautious signals from the US Federal Reserve (Fed) regarding prolonged high interest rates also dampened investor sentiment for risk assets.

On-chain flows also acted as a burden. An increase in Exchange Reserves meant more Ethereum was held on centralized exchanges, which is typically seen as a signal of increased selling pressure. Furthermore, repeated failures to break the $2,400 resistance level led to market assessments that new spot buying demand was not sufficient to absorb the incoming supply.

The short-term key is the $2,200 support level. This zone coincides with the 100-day moving average, making its defense crucial. The daily Relative Strength Index (RSI) is 31.07, approaching oversold territory, suggesting potential for a rebound, but below $2,400, bearish pressure is still predominant.

From a supply and demand perspective, the inflow of funds into Ethereum spot ETFs is considered a variable in how much selling pressure it can offset. This product recorded net purchases for four consecutive trading days, with $11.5 million flowing in on May 6. However, it is assessed that a short-term recovery breaking above $2,350 and a confirmed upward breakthrough of $2,500 would be needed to quell concerns about whale-driven selling.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*