Ethereum (ETH) has been struggling under the weight of selling pressure from large investors, also known as “whales,” and a looming liquidation risk that could trigger a steep market decline. In the past week alone, Ethereum has dropped by 12.75%, and market sentiment is leaning more bearish as the cryptocurrency faces major resistance levels and increasing selling activity. With whales unloading significant amounts of ETH and the potential for a liquidation cascade, Ethereum’s price could see further downside in the coming days.

Whales and Liquidation Risks: A Brewing Storm for ETH

The past 24 hours have seen notable movements from Ethereum whales, who hold large portions of the cryptocurrency’s supply. Whale activity is often a precursor to significant price shifts, and Ethereum is no exception. For example, Lookonchain reported that a whale holding 6,131 ETH, worth about $10.94 million, transferred their assets to Binance, a centralized exchange. When large amounts of crypto are moved to exchanges, it typically signals the possibility of selling. If this whale, along with others, begins to sell, Ethereum’s price could face sharp declines.

Adding to the selling pressure is a risk of liquidation for two large Ethereum positions on the Maker platform. These positions, which total 125,603 ETH (valued at $229 million), are at risk of being liquidated if the price of ETH drops below certain thresholds—$1,787.75 and $1,701.54. If these positions are forced to close, it could fuel a wave of fear in the market, leading to more ETH being sold. This cascade effect could push the price even lower, creating a dangerous downward spiral.

A Critical Moment for Ethereum’s Price Action

Ethereum’s current price movements are dominated by whales, and recent data from IntoTheBlock shows that large traders have been active, transacting about $1.87 billion worth of ETH in just the past 24 hours. During the same period, the price of ETH dropped by 1.85%, which indicates that whale selling is contributing to the decline.

The market is also facing massive resistance to upward price movement. According to the In/Out of the Money Around Price metric, there are 7.89 million ETH sell orders concentrated between the price levels of $1,857.97 and $1,963.02. These sell orders are spread across 5.82 million addresses, creating a formidable barrier to upward movement. If Ethereum attempts to rally, these sell orders could cap the price and even push it lower, reinforcing the bearish sentiment in the market.

Declining Trading Volume and Bearish Sentiment

Ethereum’s price struggles are compounded by a noticeable drop in trading volume. In the past 24 hours, only 614,000 ETH were traded, reflecting a lack of enthusiasm in the market. A decline in trading activity often signals decreased investor confidence, and with sentiment turning more bearish, traders seem less inclined to hold onto their ETH positions. As more traders opt to sell their holdings, the overall selling pressure continues to grow, making it harder for Ethereum to recover.

The combination of whale selling, potential liquidations, and a strong resistance zone suggests that Ethereum’s downside risks are currently outweighing the chances of a significant rally. Unless new bullish catalysts emerge, Ethereum may struggle to break free from its current bearish trend.

Conclusion: Can Ethereum Avoid a Market Collapse?

Ethereum is facing a critical moment. The significant selling from whales, the risk of liquidation for large positions, and the looming resistance levels present serious challenges for the cryptocurrency. While the market sentiment remains bearish, and Ethereum’s price continues to struggle, the key question remains whether ETH can find support and avoid a further decline.

With the growing pressure from whales and the possibility of a liquidation cascade, Ethereum’s price could continue to fall in the short term. Traders and investors should closely monitor the developments in the derivatives markets and watch for any signs of stabilization in Ethereum’s price. If Ethereum can hold its ground above key support levels and rally against resistance, it may yet avoid a full-scale market meltdown. However, at this moment, the risks seem to outweigh the potential for a price recovery.