Ethereum price dipped below the $3,000 mark on Tuesday May 2, 2024 after bulls failed to build on the 9% weekend rebound that saw ETH soar as high as $3,300 on April 28, but recent whale activity offers a glimmer of hope.
Ethereum Price Surrenders Weekend Gains after Fed Rate Announcement
Ethereum price showed early recovery signs last weekend, as the bulls engineered a 9% recovery between April 27 and April 30.
But with the bulls failing to sustain the weekend demand surge, ETH bears swiftly returned to the driving seat, forcing a 14% downswing in the last 48 hours, which has seen Ethereum price dip below the $2,820 mark for the first time in 75 days.
Ethereum Price Action
Ethereum’s latest 14% price downswing could be attributed to an underwhelming announcement from the US central bank. On May 1, the US Federal Reserve announced its decision to keep its monetary rates unchanged, while emphasizing the desire for 2% inflation rate target.
While US inflation rate is still trending above 4%, many risk asset investors, including Blackrock CEO Larry Fink, have made public statements in anticipation of multiple rate cuts in 2024.
Unsurprisingly the Fed rate freeze had further intensified the bearish headwinds surrounding the crypto market, with ETH price tumbling to a 75 day low of $2,815.87 within 24 hours of the announcement.
Whales Invest another $18M as ETH Dips Below $3k
Looking beyond media headlines and short-term ETH price action, recent movements observed among Ethereum whale investors offers a glimmer of hope.
Santiment’s chart below illustrates historical records of balances held by Ethereum’s top 1,000 largest wallets.
Ethereum Supply Held by Top 1000 Wallets | Santiment
Ethereum’s top 1,000 wallet held a cumulative balance of 75.11 million ETH as of April 28 as depicted in the chart above. But, while prices have declined 16% since then, Ethereum whales have not thrown in the towel in reaction to the Fed rate pause. Instead, they have capitalized on the price dip to increase their holdings.
At the time of writing on May 2, the Ethereum whales now hold a cumulative balance of 75.17 million ETH, reflecting an increase of 6,000 ETH within the last 3-days. Valued at the current price of around $2,995 per coin, these whales have effectively invested approximately $18 million this week.
Such large volume of whale buying pressure during a period of market downturn can help the asset price maintain relatively high support levels or even trigger an early rebound phase.
For context, when whales make large purchases, it provides much-needed market liquidity, allowing panic sellers to execute trades without an accelerated drag on prices.
But more importantly, considering that majority of the top 1,000 Ethereum wallets belong to ETH 2.0 stakers, a portion number those coins could be momentarily out of short-term market supply. This could marginally reduce the sell-side pressure on Ethereum in the days ahead.
Ethereum (ETH) Price Forecast: Short-term Rebound above $3,100
Drawing insights from Ethereum whales’ $18 million investment this week, ETH price looks poised for an imminent rebound towards $3,200.
IntoTheBlock’s GIOM data further emphasizes this bullish outlook. It shows that having prevented a downswing below $2,800, the bulls can now set their sights on a rebound phase. However, Ethereum must first scale the looming sell-wall at the $3,100 territory.
As seen below, 10.43 million addresses had acquired 10.22 million ETH at the average price of $3,107. If they opt to exit early, ETH could struggle to advance further in the near-term.But if they can stage a decisive breakout above that range, bull can anticipate at $3,500 retest.