Ethereum slipped around 5% towards $1.9k as whale sales and ETF outflows affected sentiment, despite a bullish divergence in the RSI hinting at a potential reversal.
Ethereum (ETH) has been trading near a critical support level as large holders sold significant amounts of the cryptocurrency, creating downward pressure despite technical indicators suggesting a potential reversal, according to market data and on-chain analytics.
The cryptocurrency displayed a bullish divergence on the 12-hour charts, with the Relative Strength Index hitting a higher low while the price established a lower low over the previous month. This technical pattern usually precedes price reversals in traditional technical analysis.
However, significant selling activity from large holders has complicated the technical outlook. According to blockchain data, a major wallet address sold a substantial amount of Ethereum over a concentrated period. Another sleeping whale address moved coins to an exchange after remaining inactive for years, a move typically associated with selling intentions. Ethereum co-founder Vitalik Buterin also sold a notable amount in recent days, according to the data.
BitMine Immersion Technologies has bucked the broader trend, significantly increasing its Ethereum holdings to represent a notable share of the circulating supply, according to company disclosures. The company maintains a large position generating an annualized return and completed a significant purchase last week. The company has publicly announced an acquisition target that would capture a significant portion of the total supply.
Traditional financial institutions have shown opposite behavior. According to fund flow data, Ethereum exchange-traded funds have seen consecutive weeks of net outflows, indicating that capital is flowing out of these regulated investment products.
On-chain metrics have presented mixed signals. New wallets received significantly higher inflows than normal, whale inflows exceeded average levels, and major profit and loss wallets added significant amounts, blockchain analytics firms reported. The combination of ETF outflows and significant whale sales has maintained downward pressure on prices in the short term.
The cryptocurrency’s price trajectory depends on whether current support levels are maintained, analysts noted. A daily close below the key support level would invalidate the bullish divergence trend and expose lower support zones. Technical analysts have identified a bearish scenario involving continued selling by large holders, continued ETF outflows and an absence of buying interest until a lower level triggers capitulation selling.
The alternative scenario requires the support level to hold, followed by a recovery from recent consolidation highs, which would signal a reversal trend and an open move towards the next technical resistance level, according to chart analysis.