On a recent Thursday, the price of Ethereum (ETH) fell by 5%, sparking discussions among traders about its ability to recover and close above the $3,700 resistance level before the end of the quarter.
What Caused the Drop?
LookonChain data revealed that a skilled whale, potentially linked to Longling Capital, purchased 6,000 ETH during the price dip. This entity is known for precise timing and has already accumulated profits totaling $83 million.
Since May 8, 2023, this whale has acquired 75,400 ETH at an average price of $2,392 and sold 50,800 ETH at an average of $3,401, netting substantial gains.
Trader Insights and Market Sentiment
Short-Term Scenarios for ETH Holders
Trader MaxBecauseBTC recently outlined two potential scenarios for Ethereum holders over the next six months in a post on X:
- A bullish case highlighting strong upward potential.
- A cautious outlook emphasizing market volatility.
Max encouraged traders to embrace market fluctuations, stay resilient, and focus on potential gains rather than short-term losses.
Key Resistance Level
Cold Blooded Shiller emphasized that the $3,700 quarterly resistance level remains a critical barrier. With just 12 days left in the quarter, he anticipates intense trading activity as the market attempts to close above this threshold.
Despite trading above $3,700 for six consecutive quarters, Ethereum has yet to achieve a quarterly close above this level.
Historical Comparison
Another trader, Ted, compared Ethereum’s current struggle near the $4,000 resistance to its behavior around the $1,400 level during the 2020–2021 cycle. He predicts a similar breakout, potentially leading to a close above $4,100 and new all-time highs.
Market Data and On-Chain Activity
IntoTheBlock data indicates several noteworthy trends:
- Large transaction volumes dropped by 11.7%.
- Daily active addresses decreased by 5.6%.
- Exchange net flow declined by 132.2%.
Transactions exceeding $100,000 increased from 10,365 to 11,817 within 24 hours.
Currently, 81% of ETH holders are in profit, while 8% are at break-even.
Institutional Interest Remains Strong
BlackRock’s iShares Ethereum Trust (NASDAQ: ETEA) recorded a net inflow of $80.7 million on Wednesday, bringing total inflows to $3.4 billion. This signals sustained institutional confidence despite short-term volatility.
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Frequently Asked Questions
Why did Ethereum’s price drop suddenly?
The decline was driven by a combination of profit-taking, lowered large-transaction volumes, and decreased active addresses, contributing to short-term selling pressure.
What is the significance of the $3,700 level?
This price point has acted as a major psychological and technical resistance level. A quarterly close above it could signal stronger bullish momentum.
How are institutions responding to the dip?
Major players like BlackRock continue showing interest, with significant inflows into Ethereum-based financial products, indicating long-term confidence.
What can traders expect in the coming weeks?
Market participants should prepare for volatility as the quarter ends, with key levels like $3,700 and $4,000 likely to influence price action.
Are whale purchases impacting the market?
Yes, large accumulations by whales often provide support during dips and can indicate potential price reversals.
Is now a good time to buy Ethereum?
While market conditions are unpredictable, historical patterns and institutional activity suggest potential growth for informed investors.