Whales Swept Up the Volume Dumped by Retail Investors, Will Ethereum Launch an Explosive Rally?

▲ Ethereum (ETH)/ChatGPT generated image ©

Retail investors have dumped their holdings in a panic sell, which giant whales are rapidly sweeping up, creating a tense atmosphere, like the calm before a storm, for altcoin leader Ethereum (ETH) before a massive explosion. Analysts suggest that if Ethereum, which has broken out of a boring 6-month downtrend channel, surpasses the $2,400 resistance level, a massive $1.94 billion in liquidity could be unleashed, potentially leading to an unprecedented bull run, drawing significant market attention.

According to TradingNews, an investment media outlet, on April 29 (local time), Ethereum rose 1.65% during intraday trading, trading at around $2,340. This is a significant move, breaking through the upper resistance line of the downtrend channel that has continued since late last year, and simultaneously recovering the 100-day simple moving average near $2,200, establishing the strongest upward foundation in the last six months.

The most striking phenomenon in the current market is the stark divergence in actions between retail investors and large institutions. Over the past week, retail investors, gripped by fear, dumped 756,000 Ethereum tokens onto the market, but whales readily absorbed them, accumulating more. Notably, Bitmain, a company associated with Fundstrat, swept up an additional 45,000 Ethereum tokens, worth approximately $103.5 million, in a week. Meanwhile, Ethereum holdings on exchanges have hit their lowest level since 2016, signaling a severe supply shortage.

Indicators from the derivatives market also point to a strong upward breakout. The consistently negative funding rates for Ethereum perpetual futures and the decrease in Open Interest suggest an overly concentrated number of short positions. If Ethereum breaks through the $2,400 resistance level, which it has repeatedly failed to overcome, with strong trading volume, a short squeeze of $1.94 billion (buying pressure caused by the liquidation or covering of short positions) could be triggered, propelling the price to $2,800 in one go. The Moving Average Convergence Divergence (MACD) on the daily chart has also turned into a strong buy signal.

Furthermore, Ethereum's historical May performance statistics are fueling bullish sentiment. Since its launch in 2015, Ethereum has consistently recorded an impressive average monthly return of 34% in May. If this historical average is replicated in May this year, it could jump to the $3,100 level instantly. However, the media pointed out that the $50 million weekly outflow from Ethereum spot ETFs and its strong correlation with the price movements of the leading cryptocurrency, Bitcoin (BTC), remain downside risks that need to be overcome.

Experts diagnose that current Ethereum is entering a structural recovery phase, not just a simple momentum chase. A strict strategy is required: maintain a bullish bias above the $2,200 support level, respond with aggressive buying if it breaks $2,400, but only sell if $2,000 collapses. The next 96 hours, which will determine whether Ethereum breaks through the $2,400 level, involving $1.9 billion in liquidity, are expected to be the biggest watershed moment for Ethereum's medium-to-long-term fate.

*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.*