Middle East risk and whale selling pressure! Ethereum's 'double whammy'...Will it fall to $1,600?

▲ Ethereum (ETH) ©Godasol

Ethereum (ETH) is testing the lower support line of a 'Megaphone Pattern,' raising the possibility of a further decline to $1,600 rather than a recovery to $2,000. The escalating military tensions between the United States and Iran, coupled with selling pressure from whale investors, are weighing heavily on the short-term bearish outlook.

According to investment media FXEmpire on July 8 (local time), Ethereum continued its weakness, falling by more than 2.6% around $1,725. After encountering resistance near the $1,800 upper resistance line of the bearish megaphone pattern, the price fell below the 20-period exponential moving average (EMA) of $1,764 and is currently testing the lower trendline of the megaphone pattern in the $1,730-$1,740 range. The media predicted that if this support line breaks, a further decline could follow, starting with the 0.5 Fibonacci retracement level of $1,695, then to $1,659 and $1,608.

Technical indicators also support the bearish sentiment. The megaphone pattern is characterized by higher highs and lower lows, indicating increasing volatility as the divergence between buying and selling pressure widens. The Relative Strength Index (RSI) fell from the overbought zone to 43, signaling weakening buying momentum. However, the media analyzed that if a rebound from the bottom of the megaphone is successful amidst increased trading volume, there is still a possibility of an attempt to rise back to the $1,800 resistance line.

The macro environment is also a burden. The media reported that the unstable truce between the US and Iran is again shaking, as the US launched additional airstrikes on over 80 facilities in Iran, and Iran retaliated by attacking US-related military facilities in Bahrain and Kuwait. As a result, international oil prices surged by more than 5%, and risk aversion sentiment expanded, leading to selling pressure across the broader cryptocurrency market.

On-chain indicators were also cited as factors limiting recovery. According to CryptoQuant data, the realized price for whale investors holding 100-1,000 ETH is approximately $2,400, for the group holding 1,000-10,000 ETH it's around $2,250, and for the group holding 10,000-100,000 ETH it's about $2,050. The media analyzed that if the spot price rebounds into the $2,000-$2,400 range, selling pressure from whale investors looking to recover losses could increase, as the current price is below their average purchase cost. Conversely, the realized price for super-large whales holding over 100,000 ETH is approximately $1,700, which is similar to the current price, suggesting that $1,700 will act as a crucial on-chain support level.

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