Ethereum whales are showing signs of profit-taking as unrealized profits surge to 2021 peak levels.
Spot Ethereum ETFs saw significant outflows, signaling a shift in institutional investor sentiment.
Citigroup’s bearish forecast and technical indicators suggest that Ethereum may face challenges ahead, possibly dropping toward $4,000.
Ethereum could be on the verge of encountering a rough path ahead, with significant selling activity from whales as the price of ETH rises. Data from CryptoQuant shows that Ethereum whales, holding between 10,000 and 100,000 ETH, have seen unrealized profits increase to levels similar to those observed at the peak of the 2021 market cycle. This historically signals that large holders may begin to take profits, increasing selling pressure.
In recent weeks, the outflows from Ethereum spot ETFs have raised alarms about institutional sentiment. On September 18, Farside Investors noted a net outflow of $1.89 million, including significant withdrawals from Fidelity’s FETH and Bitwise’s ETHW ETFs. This activity points to institutional investors exiting the market, even amid the Federal Reserve's 25-basis-point rate cut.
Furthermore, data from Onchain Lens revealed a whale transferring 5,000 ETH worth approximately $22.84 million to Binance, realizing a profit of over $5 million.
Bearish Outlook from Citigroup Raises Concerns
The pressure on Ethereum is further compounded by Citigroup’s bearish outlook for the cryptocurrency. The financial giant has projected that ETH could end the year at $4,300, with a worst-case target of $2,200. Citigroup’s stance comes amid broader macroeconomic factors that have somewhat contributed to Ethereum’s rally beyond $4,500. Still, the combination of whale activity and the bank's cautious forecast signals a potential slowdown for ETH.
Despite recent price gains, technical analysis presents a cautionary picture for Ethereum. Analyst Ted Pillows pointed out that ETH is still struggling below the $4,700 resistance level. A failure to break above this price could result in a price correction toward $4,000. Additionally, Ali Martinez of Onchain Lens identified a sell signal from the TD Sequential indicator, further suggesting a potential drop in ETH’s value to around $4,570.
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