Are whales dumping? Ethereum plummets before the $2,400 barrier

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

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

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

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

On-chain trends also posed a burden. As Exchange Reserves increased, the amount of Ethereum held on centralized exchanges grew, which is typically seen as a sign of increasing selling pressure. Furthermore, with repeated failures to break the $2,400 resistance level, the market assessed that new spot buying was not sufficient to absorb the incoming supply.

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

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

*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.*