Reason behind Ethereum's Steep Decline
Unleashed Chaos: Ethereum's Whale-Driven Rollercoaster in the Global Market
The crypto world is still reeling from Ethereum's (ETH) plunge, diving below the $2k threshold on March 28, 2025, and failing to recover since. The latest on-chain data unveils a narration of power struggles as large investors, aka whales, have been offloading colossal amounts of ETH into the market.
The crypto market has shown tentative recovery within the last 24 hours, with the total market cap sprinting past the $3.04 trillion mark. Trading volume has soared, hitting over $151 billion. The Fear and Greed Index indicates 'Greed,' with Bitcoin inching up approximately 3%.
Old Timers Hitting the Exits: Ethereum Exodus to Exchanges
Per SpotOnChain insights, an antique investor wallet, associated with the Ethereum Foundation, kicked off its long slumber, selling a staggering 1,001 ETH—approx. a small fortune—on the Kraken exchange on March 10. This wallet, immobilized for six years, sprang back to life and has since unloaded a whopping 12,890 ETH—approximately 21 million dollars—in total, with an average sale price of $668. The ETH was initially purchased at around $1.20 each. As of now, approximately 28,000 ETH, roughly 44 million dollars, remain in the wallet.
A significant investment firm, Paradigm, spewed 5,550 ETH—around 8 million dollars—into Anchorage Digital, marking the return of their corporate broker platform after 9 months of hibernation. The average sale price for these transactions hovered around $3,109.
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Buy Low, Sell High: The Whale's Game
In accordance with a report by LookOnChain, another whale discharged an astounding 2,560 Ethereum—close to 3.2 million dollars—at $591, concluding their position. Then, they began a 10x leveraged short position against Ethereum's price on the Hyperliquid platform. This whale-induced drama saw Ethereum losing around 5% of its value over the last 24 hours, albeit partially recovering since.
Just around sunrise on Tuesday morning, ETH prices plummeted from around $650 to $557. Since the beginning of the year, it has shed around 50% of its worth. At the time and place of writing, Ethereum is doing business at an average of $623. The 24-hour trading volume has increased by 32%, hitting the $15 billion mark.
As per CoinGlass data, approximately $70 million worth of long and short positions targeting Ethereum's price were liquidated within the last 24 hours. Approximately 73% of these liquidations (nearly $51 million) were long positions, a crucial indication that investors' hopes for recovery were thwarted as whales started selling en masse.
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In the thick of it: Whale Activity then and now
In the world of 2025, Ethereum bore the brunt of fluctuating fortunes, including a nosedive that obliterated the gains of 2024, mostly due to whale-triggered sell-offs. In early April 2025, a whale selling ETH after holding it for 900 days was a headline-maker, missing a potential profit peak of almost $28 million. This reiterates that some whales are deciding to cash out either to seal profits or because of deteriorating market conditions.
Whale sell-offs are typically incited by market sentiment and the urge to transform profits before impending downturns. These transactions can stir investor disquiet, amplifying market volatility as flagship transactions can influence overall market dynamics.
The Big Picture: Ethereum Market's Future Outlook
- Volatility and Price Plunge: When whales unload massive amounts of Ethereum, it might escalate market volatility and potentially reach new depths in the price drop. This was evident when Ethereum plummeted by 45% in Q1 2025.
- Impacting Investor Trust: Large-scale disposals by whales can undermine investor faith, potentially triggering a broader market slide. This is underscored by Ethereum's 51.3% price drop since the onset of 2025.
- Centralization Concerns: While whales are also acquiring Ethereum, as evidenced in April, increased concentration of ownership can lead to centralization issues. This centralization can engender risks if whales decide to unload in large quantities, intensifying the market's instability.
- Stability or Further Slide: If whales persist in maintaining their positions or adding more ETH, it could help stabilize the price. Conversely, if they decide to dump en masse, it could exacerbate market downturns.
- The Ethereum Foundation wallet, dormant for six years, sold a significant amount of ETH on Kraken in March 2025, signifying old timers exiting their positions.
- An investment firm, Paradigm, returned to Anchorage Digital in March 2025, selling a substantial amount of ETH, marking a surge in Ethereum selling from institutional investors.
- LookOnChain reported a whale liquidating an astounding 2,560 Ethereum at $591 in March 2025, initiating a 10x leveraged short position against Ethereum's price, which led to a 5% plunge in Ethereum's value.
- Whale sell-offs in 2025, such as the one in early April, have the potential to influence overall market dynamics, undermine investor trust, and increase market volatility, potentially leading to new lows in Ethereum's price.
