Ethereum (ETH) has been swept up in the downturn, shedding nearly 16% of its value this week. However, in a surprising turn, whales—investors holding large amounts of ETH—have been actively accumulating 25,000 ETH, potentially signaling a buying opportunity. With Ethereum trading at $3,269.9 as of 6 AM on January 10, the question remains: Is Ethereum primed for a bounce, or will the market continue its downward trajectory?

Ethereum’s Price Drop Amid Market Turmoil

Ethereum’s price has experienced a dramatic fall from a high of $3,332.7 earlier this week to its current level, marking a 1.5% drop on January 10. The recent plunge is primarily attributed to Bitcoin’s drop from $100K on Tuesday to a retest of $92K in the late New York session on Thursday. As a result, Ethereum has followed Bitcoin’s decline, losing substantial value.

Despite the market’s turbulence, Ethereum whales appear undeterred. Data from Santiment reveals that the supply of ETH on exchanges has dropped significantly from 10.67 million on January 7 to 10.42 million today, suggesting that long-term holders are moving their assets off exchanges, possibly in anticipation of a price rally.

Whale Activity and Market Sentiment

The increase in whale activity during this market crash is notable. Ethereum’s top holders, those with more than $100,000 in capital, have accumulated an additional 25,000 ETH, a clear sign of confidence despite the broader market decline. Whale transactions over $100K and even $1 million spiked late on Thursday, further indicating that these high-net-worth investors are taking advantage of the volatility to buy the dip.

In contrast to the typical pattern where whale transactions spike after a rally (indicating profit-taking), the surge in whale transactions after a market crash often points to accumulation. This could signal that smart money is positioning itself for a potential bottom, suggesting that Ethereum may be near a turning point.

Is the Bottom In Yet?

With such strong evidence of accumulation, many retail investors are now wondering if Ethereum has reached its bottom. Bitcoin’s recent low of $91,151 on January 9 could mark the end of its correction, and if Bitcoin stabilizes or reverses its trend, Ethereum could follow suit. Should Bitcoin form a bullish swing failure pattern at $90,835, Ethereum could be poised for a recovery rally, particularly if Bitcoin’s downtrend concludes in the next few days.

Ethereum’s Bullish Setup for January 2025

From a technical perspective, Ethereum’s daily chart reveals the formation of an inverse head-and-shoulder pattern. This pattern, often seen as a bullish reversal signal, indicates that Ethereum could be setting up for a 44% rally to $5,825. The depth of the head is added to the breakout point at $4,000 to estimate the potential upside.

For Ethereum to confirm this bullish outlook, it will need to overcome key resistance levels at $3,600, $3,843, and $4,000. A breakout above these levels would solidify the case for a bull run, potentially driving Ethereum towards the $5,825 target, or even higher. Some analysts speculate that Ethereum could reach the psychological $6,000 level by the end of January 2025.

Key Support Levels for Ethereum

As Ethereum continues to navigate through the current market correction, key support levels to watch include $3,278, $3,029, $3,000, and $2,739. If these levels hold, Ethereum may form a stable bottom from which a rally could begin.

Conclusion: Will Ethereum Bounce or Continue to Fall?

The accumulation of 25,000 ETH by whales during this market downturn suggests that Ethereum may be near a turning point. While the inverse head-and-shoulder setup hints at a potential rally, the market remains uncertain. If Bitcoin finds its bottom and begins to recover, Ethereum could follow suit, breaking through key resistance levels and resuming its bull run.

However, the market remains volatile, and investors should remain cautious. If Ethereum fails to hold its support levels, a deeper correction could follow. For now, all eyes are on the key support levels and Bitcoin’s price action, which will likely determine whether Ethereum’s rally materializes or the market faces further decline.