Ethereum whales have been making moves. Just recently, a wallet linked to the Ethereum Foundation sold 2,785 ETH, worth approximately $6.42 million, for USDS through CoWSwap.
The impact of big players’ moves seemed to be evident on the daily chart too. In fact, Ethereum now faces renewed selling pressure after breaking below its ascending trendline support near $2,350. At the time of writing, ETH was trading at $2,317.
What is more intriguing is that the bearish price move came after the network’s funding rates shrunk significantly recently, signaling a shift in derivatives market conditions. Meanwhile, ETH exchange reserves fell to their lowest level in a week.
The last suspected Ethereum Foundation sale was 2 weeks ago, and ETH’s price dropped by 9% soon after. Could the same move be in line again? Let’s find out!
Funding rates fall as whales turn bearish
According to the recent derivative data, Ethereum funding rates have dropped by 56% to 0.004 over the last 24 hours, pointing to a significant change in the cost or balance of perpetual futures positioning. The network’s funding rate has been progressively shrinking since the beginning of October.
For investors, the decline alludes to falling demand for leveraged long positions or a shift towards more bearish sentiment.
Source: CryptoQuant
Falling exchange reserves offer a counterpoint
As holder sentiment weakened, the network reserves also seemed to be shrinking across all exchanges.
In fact, ETH exchange reserves fell to their weekly lowest level at $3.2 million. The decline suggested that fewer tokens were immediately available on exchanges for selling, potentially limiting some spot-market supply.
However, reserve declines do not guarantee reduced selling pressure as holders can transfer ETH to exchanges later or sell through other venues.
Source: CryptoQuant
ETH breaks ascending trendline support
On the daily charts, ETH lost its ascending trendline around $2,350 that had held for months following recent bearish advances.
If ETH fails to reclaim this level, sellers could retain control and push the price lower. On the other hand, a sustained move back above the broken trendline, however, would weaken the bearish setup and suggest that buyers were attempting to regain control.
All in all, the breakdown below $2,350 and reported whale short positioning favor a cautious outlook. As a result, sustained weakness could prolong the decline, while a reclaim of the broken trendline and sustained spot demand would challenge the bearish case.
Source: TradingView
Final Summary
- Ethereum broke below its ascending trendline near $2,350 as funding rates fell by 56% over 24 hours.
- ETH exchange reserves hit a weekly low, potentially limiting immediately available exchange supply.
