The Ethereum (ETH) market is at a crucial crossroads, as whale activity raises red flags while retail users continue to show strong engagement. With major sell-offs and aggressive short positions emerging from large holders, concerns are mounting about a potential correction. Still, network-level data paints a different picture, suggesting that Ethereum’s foundation remains robust despite bearish pressure.

Whale Moves Stir Market Anxiety

Recent movements by Ethereum whales have reignited speculation about a looming price drop. A wallet linked to the Ethereum Foundation deposited 1,000 ETH—worth approximately $1.58 million—into Kraken. Notably, this wallet has been dormant for over a decade, accumulating more than 84,000 ETH during Ethereum’s earliest days when the price was near $1.2.

Adding to the sell-side pressure, another significant whale dumped 2,056 ETH at $1,591 and opened a leveraged short position on Hyperliquid. The 10x short indicates high confidence in near-term downside and signals that institutional players may be preparing for a market correction.

Institutional Activity Climbs

Supporting this theory, large transaction volumes have spiked dramatically. According to IntoTheBlock, transfers exceeding $1 million have increased by 64.24%, while those over $10 million have surged by 185.71% in just the last week. This surge in high-value transfers suggests large holders are actively repositioning in anticipation of volatility.

This type of behavior is typically seen ahead of broader market moves. Whales may be preparing for profit-taking, hedging with shorts, or simply reallocating capital away from Ethereum—all of which could apply downward pressure on price.

Retail Users Remain Unshaken

Despite this wave of whale activity, Ethereum’s retail user base appears unaffected. Transaction data shows that transfers between $1 and $100—common among retail users—have risen 6.71% and 4.82%, respectively. These increases highlight continued grassroots engagement with the Ethereum network, even amid price uncertainty.

Moreover, network growth metrics remain strong. Over the past week, the number of new Ethereum addresses climbed by 13.93%, while active addresses grew by 3.09%. The number of zero-balance wallets—typically wallets reactivating after a period of dormancy—also rose by 8.82%. These statistics suggest that Ethereum’s user base is expanding and re-engaging, providing a buffer against rapid declines.

Liquidation Risks Mount for Overleveraged Longs

However, traders betting on Ethereum’s rise may be in for a rough ride. Coinglass reports that on April 22, long liquidations totaled $25.71 million—five times higher than the $5.17 million in short liquidations. This imbalance underscores a growing risk: if bearish momentum builds, many long positions could be liquidated, intensifying the downturn.

Adding to the complexity, Ethereum’s derivatives market saw a massive spike in activity. Futures volume rose 49.48% to $48.16 billion, while options trading volume increased 59.34%. However, total open interest slipped by 2.87%, indicating that traders are closing out positions or hesitating to commit further—signs of market indecision.

At press time, Ethereum was trading at $1,584.44, down 3.71% over the past 24 hours.

Outlook: Is a Deeper Correction Ahead?

Ethereum currently stands at a pivotal point. On one hand, strong retail engagement and consistent address activity suggest that the network remains fundamentally sound. Users are still participating in transactions, and new addresses are joining at a healthy pace.

On the other hand, whale behavior and leveraged short positions suggest that influential market participants anticipate further downside. With large ETH transfers and open shorts, whales appear to be protecting themselves—or potentially betting on—continued price weakness.

Whether Ethereum can hold its ground or slides further will likely depend on how the broader market reacts to these signals. If retail demand remains strong and new capital enters, Ethereum could stabilize. However, if whale exits trigger a broader sentiment shift, deeper losses may be on the horizon.

In the short term, all eyes are on price action around the $1,580–$1,600 range. A firm hold here could inspire recovery, while a break below may accelerate the correction that whales seem to be betting on.