Ethereum (ETH) drops under $2,000 again, whales rush to buy the dip

Ethereum (ETH) dropped under $2,000 once again, losing over 5% overnight. ETH had a deeper crash than Bitcoin (BTC), which only took a step back to $86,000.

Ethereum (ETH) crashed again, sinking under $2,000 after a general market downturn. The token has not achieved the promised breakout, and trades at 0.022 BTC. In fiat terms, ETH traded at $1,917.21, close to its three-month lower range.

Ethereum (ETH) trades near a three-month low, though there are signs whales are accumulating at levels under $2,000. | Source: CoinGecko

ETH sentiment remains neutral, and open interest has fallen to $9.9B. Derivative traders have built up liquidity at the $2,040 and $2,100 levels, but ETH may dip as low as the $1,800 range to liquidate long positions, before returning for a short squeeze.

Whales accumulate ETH under $2,000

Despite the market drawdown, ETH is still inviting whales to buy the dip. The token is still required for DeFi, trading and other utility purposes, or as collateral in DeFi lending. ETH remains at a crossroads, with 45% of holders in the money, 51% holding unrealized losses, and a small neutral sub-section.

Narratives for ETH are conflicting, with some talk of the token becoming obsolete or falling to a lower range. However, recent whale accumulation shows the token is at least considered capable of a relief rally.

Individual whales are also taking ETH off exchanges, as in the case of one buyer acquiring $108M in ETH. An earlier example shows a whale buying up ETH from retail traders in multiple orders for the last quarter.

While ETH is not immediately scarce, whales are accumulating easily accessible coins for trading and short-term profit-taking. Holding ETH in a self-controlled wallet still has utility, such as staking, lending, or providing liquidity.

ETH also sees selling pressure from hackers

ETH remains the token most widely used to park proceeds from hacks and exploits. Some of the ETH from the Bybit exploit may still be laundered through decentralized services.

Recently, two addresses received 14,064 ETH from THORChain and CoinFlip. They quickly traded the tokens for over $27M in DAI, at a price of $1,956 per ETH. One of the addresses continues to receive ETH from THORChain, as the origin of funds remains unknown.

Hacker traders are extremely aggressive, using decentralized liquidity pools with little regard for fees or price slippage. Unlike trader whales, hackers use the first suitable moment to sell and move funds.

Ethereum fees remain near all-time lows

Ethereum fees are still near all-time lows, signaling low demand for the network’s services. Average transactions are as low as $0.02, as only a few services are widely used.

A big part of gas on Ethereum goes to stablecoin transfers, as well as the Uniswap Universal Router. General ETH transfers and USDT movements burn around 58 ETH per day from fees, and they are the two most significant activities on the network. Other types of swaps, bridging or NFTs minting have slowed down, as fewer projects organize airdrops with point farming.

Decentralized swaps have fallen to a price of $0.28, DeFi borrowing fees are at $0.23, and bridging is down to $0.09. Despite this, network activity has slowed down significantly and retail users are not returning.

The Ethereum network carries 310K daily active wallets, a level not seen since September 2024. At the same time, more addresses are receiving ETH, showing a spike to over 203K wallets.

As a result of lowered activity, Ethereum inflation continues to rise, breaking out to 0.80% for the first time in months. Low but persistent inflation means the network now produces 948K additional ETH in a year, an inflow that may continue to depress the price and shift the token to a lower range.

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