The price of Ethereum has sharply declined from yesterday’s (August 17) opening, decreasing by 14.88% to its lowest point on August 18. This crash came suddenly and left many guessing where the price is headed next.
While some have been panic selling, others have been using this opportunity to buy up crypto at a discount price. This was especially the case among the Ethereum whales.
As their activity has shown bullish sentiment, could this mean that the price is ready for a bounce?
As reported by Lookonchain in a Twitter thread, BlockTower Capital deposited 5K of ETH worth $8.4M to Coinbase to sell, while other whales have bought the dip.
Meanwhile, more buying whale activity was seen. Two whales bought a total of 5,631 ETH worth $9.5M on the dip. One whale deposited 3998 ETH worth ($6.72M) to Compound and borrowed $5M stablecoins only to buy back 3,027 ETH ($5.09M) at $1,652.
Another deposited $4M in USDC to Binance and withdrew 2,604 ETH ($4.4M) after the market crashed. A Whale named Cumberland was mostly selling a total of 8K in ETH ( worth $14.4M) before the market dumped and then bought back 4K ETH ($6.72M), withdrawing it from Binance.
Per Messari data, looking at the supply distribution charts, we can clearly see that whales haven’t been dumping, and instead, they have been increasing their holding. The price has already made a bounce off almost 10% from its dip, so the whales have definitely been offering support.
The price of Ethereum fell sharply and came down from $1,800 on its open yesterday to $1543 at its lowest wick today, decreasing 14.64%. It has already recovered by 8.5%, measured to the level on which it’s currently trading at $1,675.
ETH fell to the 0.786 Fibonacci retracement level of the previous ascending move, but the 4-hour candle closed at 0.618, leaving an 8.2% wick on the 4-hour chart. This is in itself the sign that the support is strong at the $1,670 territory as the dip was immediately bought back with a strong supply, as evident from the previous paragraph from the ETH whales.
The RSI is signaling extreme oversold conditions as it fell to 6.4% on the 4-hour chart and 20% on the daily. The last time we saw those values was in June 2022, when the market started recovering significantly.
Elliott Wave count points out that we could have seen the end of the correctional pattern WXY from mid-April. Due to all of these indicators signaling that the price is undervalued, a bounce will be expected shortly.
The first target for the expected recovery would be close, to the lower level of the resistance zone above at $1780. What happens at those levels will dictate the next sustainable uptrend, as if a rejection occurs it could set up the price into a larger downtrend. But if it manages to enter the resistance zone again, it will likely mean that it is headed further beyond it, above the mid-April high of $2130.
Please note that the contents of this article are not financial or investing advice. The information provided in this article is the author’s opinion only and should not be considered as offering trading or investing recommendations. We do not make any warranties about the completeness, reliability and accuracy of this information. The cryptocurrency market suffers from high volatility and occasional arbitrary movements. Any investor, trader, or regular crypto users should research multiple viewpoints and be familiar with all local regulations before committing to an investment.