In recent years, Ethereum ($ETH
Market Trend Analysis
According to data from CoinMarketCap, the price was approximately $3,634 in January 2025, but by March 17, it had dropped to $1,893, a decline of about 48%. This significant drop may trigger panic selling, especially after the price breaks through key support levels (like $2,000). The global cryptocurrency market may also be affected by macroeconomic factors, such as trade tensions and geopolitical uncertainty, which may lead investors to lose confidence in high-risk assets (like $ETH).
Moreover, market sentiment may be influenced by recent news events. For instance, a report on March 4, 2025, stated that President Trump announced the establishment of a U.S. crypto strategic reserve, including $ETH, but the market reaction was complex, and the price continued to decline afterward (Finance Magnates). This indicates that the market's response to favorable policies may be offset by other negative factors (such as selling pressure).
On-chain Data Analysis
On-chain data provides us with direct evidence of holder behavior. According to an analysis by CryptoQuant, the net inflow of $ETH to exchanges (i.e., inflow minus outflow) has recently shown positive values, indicating that more ETH is being sent to exchanges, possibly for sale. An increase in net inflow is typically seen as a sign of increasing selling pressure, reflecting the trend of holders liquidating.
Additionally, on-chain data shows that the amount of ETH held in exchanges may reach a 12-month high (around 16.2 million ETH), further supporting the view of increased selling pressure (TradingView News). This phenomenon may be driven by both whales and smaller holders, especially when prices drop, investors may choose to cut losses.
Fundamental Factors Discussion
Fundamental factors of the Ethereum network may also be one of the reasons for liquidation. For instance, competing blockchains like $SOL and Cardano have attracted the attention of some investors due to their higher transaction throughput and lower fees, which may lead some ETH holders to opt-out (BelnCrypto). Additionally, the planned Pectra upgrade in 2025 aims to enhance scalability and performance, but if market expectations for the upgrade's effects are not met, it may trigger a crisis of confidence.
Another noteworthy factor is the activity in the Ethereum ecosystem's decentralized finance (DeFi) and non-fungible tokens (NFT). On-chain data indicates that the total locked value (TVL) in DeFi may have recently fluctuated, potentially impacting long-term holders' confidence.
Regulatory Perspective
The uncertainty of the regulatory environment may be another significant factor driving the liquidation. For example, the U.S. Securities and Exchange Commission (SEC) stance on the regulation of crypto assets may affect market confidence, particularly impacting institutional investors (Investor.gov). Furthermore, changes in tax policies worldwide may increase the cost of holding ETH, prompting some investors to choose liquidation to avoid future burdens.
For example, a report on March 4, 2025, mentioned that the Trump administration's trade tariff policy triggered market risk aversion, which may indirectly affect ETH prices (Finance Magnates). This change in the macroeconomic environment may prompt holders to reassess their portfolios.
Whale Activity Analysis
Whales (addresses holding a large amount of ETH, typically defined as addresses holding 1,000 ETH or more) recently liquidating may be a significant driving factor in market dynamics. According to Glassnode's analysis, whales' selling behavior may include profit-taking or fund reallocation. For instance, some whales may sell to lock in profits when prices are high, while others may sell to cut losses when prices decline.
Whales' selling behavior may trigger a chain reaction, as their large transaction volumes may lead to insufficient market liquidity, further pushing prices down. For example, a report on January 17, 2025, mentioned that a whale deposited 20,000 ETH (worth about $67.6 million) into the Kraken exchange, which was interpreted by the market as a possible sell signal.
Potential Impact
1. Further price decline: Ongoing selling pressure may lead to ETH prices
to decline further, especially if market confidence remains low.
2. Market Liquidity: The liquidation by whales may reduce market liquidity and increase price volatility.
3. Long-term holders' confidence: If long-term holders continue to liquidate, it may weaken market confidence in Ethereum's future, affecting its ecosystem development.
4. Increased competition: Other blockchains may take the opportunity to attract more developers and services, weakening Ethereum's market dominance.
Conclusion
An increasing number of ETH holders liquidating, including some long-term whales, may be driven by falling prices, rising on-chain selling pressure, fundamental concerns, regulatory uncertainty, and whale behavior. This trend may have profound effects on ETH prices and market confidence.
Friends, comrades, is your $ETH still in hand? Or have you sold it for something else, waving your sleeve without taking any Ethereum with you? 😂😂😂
