Ethereum (ETH) is facing growing downside pressure despite a modest price increase to $1,832 in the last 24 hours. While the price uptick may suggest optimism on the surface, a deeper look at on-chain metrics and investor behavior paints a far more fragile picture. Market signals point to declining demand, weakening network activity, and the risk of a larger correction if the key support at $1,815 fails to hold.
A significant event amplifying bearish sentiment came as a prominent Ethereum whale concluded a 1.6-year accumulation phase. The investor, who had amassed 10,564 ETH valued at $21.78 million, recently deposited the final 3,232 ETH—worth approximately $5.72 million—into the centralized exchange Kraken. The entire liquidation earned the whale a substantial $7.6 million profit, but also raised concerns about additional selling pressure entering the market.
Whale exits such as this often precede increased volatility and can signal a shift in market sentiment. Large holders offloading assets may discourage other investors, particularly when fundamentals are showing signs of strain. One of the more troubling indicators is the steep drop in gas usage across the Ethereum network. After maintaining elevated levels above 20 billion since February, gas usage has now declined to 11.68 billion. This sharp fall typically reflects lower demand across decentralized finance (DeFi), NFTs, and other decentralized applications (dApps) that operate on Ethereum.
Historically, gas usage trends have been closely tied to Ethereum’s price trajectory. A decline in on-chain activity without corresponding user growth has often marked the beginning of stagnation or bearish trends. This is further confirmed by Santiment’s price-to-daily active addresses (DAA) divergence, which has now plunged to nearly -50%. This significant bearish divergence reveals a troubling disconnect between Ethereum’s price and user adoption—a pattern that often precedes deeper corrections.
Supporting this bearish outlook is a notable shift in investor distribution. Over the past month, mid-tier Ethereum holders have reduced their positions by 7.99%, suggesting that this group may be losing confidence in short-term price stability. In contrast, retail wallets saw a 1.33% increase, and whale holdings rose 2.26%. While whale accumulation might typically be a bullish sign, it is offset by recent profit-taking behavior, as seen with the Kraken deposit. Additionally, retail participation tends to lack the capital strength needed to drive sustained rallies.
Adding more weight to bearish arguments is a sharp decline in large transaction volumes. Transfers above $10 million have dropped by 83%, and transactions between $1 million and $10 million are down nearly 70%. These steep drops suggest that institutional investors and large stakeholders are becoming more cautious. Large transaction counts are often linked to influential market moves, and their absence could result in lower overall market volatility but also limit upside momentum.
From a technical standpoint, Ethereum is now trading just above a major long liquidation cluster at $1,815. If this level breaks, it could trigger a cascade of liquidations, pushing prices sharply lower. Conversely, short positions are heavily stacked above the $1,850 level. Should buyers step in with volume, a short squeeze could occur, temporarily driving ETH upward. This tug-of-war between leveraged longs and shorts makes the current price zone a critical inflection point.
In summary, while Ethereum’s current price appears relatively stable, the underlying fundamentals are weakening. On-chain activity is down, high-value transactions are declining, and the user base is shrinking relative to price performance. These indicators, combined with key support levels being tested and major holders exiting positions, suggest that Ethereum could be heading into a more volatile and potentially bearish phase. If the $1,815 support level fails, the market could see an accelerated correction unless new demand emerges to stabilize the asset.
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