Ethereum Spot ETF Bleeds for 10 Consecutive Days... Is the Signal of Whale Sell-off Exhaustion Real?

▲ Ethereum (ETH) ©

As risk-off sentiment (aversion to risky assets) originating from the US deepens in the Ethereum (ETH) market, Ethereum spot ETFs are showing a record-breaking sluggishness with 10 consecutive days of net outflows. Meanwhile, a strong sell-off wall from investors looking to break even has emerged as the biggest obstacle to price recovery. The on-chain average purchase price for retail investors and whales is chained to a level higher than the current market price, leading to continuous overhang pressure where accumulated holdings are sold off every time a rebound is attempted. However, despite this price stagnation, a strange decoupling signal of bottom-buying pressure entering the futures market has been detected, raising questions about the future direction of prices.

According to investment media FXStreet on May 26 (local time), Ethereum is trading around $2,110, up approximately 1% as of Monday, maintaining a sluggish trend similar to last week. CryptoQuant data analysis reveals that the biggest factor currently holding back Ethereum is the on-chain Realized Price, concentrated between $2,200 and $2,500. This range represents the average purchase price for major investor groups, and the reason the recent price has failed to break past this barrier and declined is due to intensified selling pressure from investors who, after enduring losses, immediately dumped their holdings once the price approached their break-even point. Indeed, retail investors holding 100-1,000 ETH sold off 110,000 ETH last week alone, continuing a strong distribution pattern that has been ongoing since November of last year.

In contrast, changes have been observed in the movements of whales (wallets holding 1,000-100,000 ETH), who often dictate market trends. While whales were actively selling off their holdings until last week, this week they have shifted to a wait-and-see approach, with little change in their holdings. Experts interpret this as a positive sign, suggesting that the selling pressure from whales, which had been overwhelming buying interest, is gradually exhausting or entering its final stages. As the power of sellers begins to wane amidst a sluggish sideways trend, the recovery of sentiment in the US market is identified as a key factor in determining the magnitude of any short-term rebound.

The epicenter of the selling pressure currently weighing down the Ethereum market appears to be the US region. The Coinbase Premium Index, which accurately reflects US investor sentiment, has plummeted further into negative territory last week, crawling along the bottom since its decline began in late April. Data compiled by provider SoSoValue also showed that US Ethereum spot ETFs experienced net outflows of approximately $216 million last week alone, marking two consecutive weeks of capital exodus. The unfortunate record of Ethereum spot ETFs continuing to see net outflows for 10 consecutive days, in particular, is fueling price stagnation due to the disappearance of institutional short-term bids.

In contrast to these dismal indicators in the spot market, the derivatives market shows surprisingly robust resilience. According to CoinGlass data, Ethereum futures Open Interest has slightly increased, surpassing 15 million ETH despite recent price weakness, and funding rates remain positive. This indicates an active inflow of bottom-buying from derivatives traders looking to build long positions, leveraging the decline in spot prices, creating an unusual decoupling phenomenon where bearish on-chain sentiment directly clashes with bullish trends in derivatives.

The media diagnosed that Ethereum is clearly showing a short-term bearish bias, being trapped below a tightly clustered resistance level formed by the 20-day Exponential Moving Average (EMA) at $2,183, the 50-day EMA at $2,221, and the 100-day EMA at $2,308 on the daily chart. With the Relative Strength Index (RSI) hovering around 39, fully reflecting sluggish demand, even if an intraday rebound occurs following a signal of the Stochastic indicator exiting the oversold zone, it is highly likely to struggle against the moving average resistance wall above. If Ethereum fails to defend the $2,108 support level, the price risks retreating to $2,018, then $1,909, and in the worst-case scenario, to the February low of $1,741. Conversely, if it breaks through the resistance, the upside is expected to open up to $2,388, eventually reaching a long-term target price of $2,746.

*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.*