Ethereum (ETH) Falls 10% as Whale Activity Declines

Ethereum (ETH) has experienced a significant drop of nearly 10% on February 25, 2025, pushing its market capitalization below the $295 billion mark for the first time since November 2024. The decline in price has been driven by a combination of factors, including bearish sentiment in the broader crypto market, reduced whale activity, and oversold technical indicators. As ETH continues to navigate this downturn, market watchers are trying to gauge whether this represents a temporary pullback or a more prolonged downtrend.

Technical Indicators Show Bearish Momentum

Several technical indicators are signaling a continued bearish outlook for Ethereum. One of the key signals is the Relative Strength Index (RSI), which measures the speed and change of price movements to identify overbought or oversold conditions. ETH’s RSI dropped to 29, entering oversold territory for the first time since February 3, 2025. When RSI falls below 30, it often indicates that an asset has been oversold, suggesting that selling pressure may be exhausting.

However, while an oversold RSI often implies a potential for a short-term rebound, it doesn’t guarantee an immediate recovery. In the case of Ethereum, the continuation of bearish sentiment in the market may prevent any significant price movement upwards in the short term. If selling pressure continues, ETH could face further declines before any reversal takes place. On the other hand, if buyers step in at these levels, there is potential for a relief rally, but for now, the overall sentiment remains cautious.

Whale Activity Declines Amid Market Weakness

One of the most telling signs of the ongoing bearish trend is the behavior of Ethereum whales, or addresses holding at least 1,000 ETH. Over the last month, the number of ETH whales had been steadily rising, peaking at 5,828 addresses on February 22, the highest level since February 2024. However, in the wake of Ethereum’s price decline, whale activity has started to shift. The number of whales has slightly decreased to 5,812, suggesting that some large holders have begun to offload their positions. This reduction in whale accumulation is a bearish sign, as these large holders typically help to stabilize the price or even trigger rallies when they increase their positions.

Whales control a significant portion of the total Ethereum supply, and their trading behavior often influences price movements. When the number of whales increases, it usually signals accumulation, which can be a positive sign for the price. However, a decline in whale activity often signals distribution, adding downward pressure on the asset’s price. The recent drop in whale accumulation, coupled with the overall bearish technical indicators, signals a more cautious market sentiment for Ethereum.

Price Outlook: Could ETH Drop Below $2,200?

The recent drop in Ethereum’s price has also resulted in the formation of a death cross, a bearish technical pattern where the short-term moving average crosses below the long-term moving average. This is a signal that downward pressure is dominant, and it has led to a further decline in Ethereum’s price, dropping below the $2,500 level.

If the downtrend persists, ETH could potentially fall to test the support levels around $2,159. If this level breaks, Ethereum could drop below $2,200 for the first time since December 2023, further signaling the continuation of the bearish trend. For any reversal to occur, Ethereum would need to break through the immediate resistance level at $2,551. If it manages to surpass this resistance, the next target would be $2,850, but for now, the death cross and continued selling pressure suggest that Ethereum’s path remains uncertain.

Conclusion

Ethereum’s recent 10% decline reflects the ongoing market weakness, driven by oversold conditions, reduced whale activity, and bearish technical indicators. While the RSI suggests that the asset may be oversold and due for a short-term bounce, the overall bearish sentiment and decline in whale accumulation indicate that Ethereum may continue to face downward pressure in the near term. Investors will need to closely monitor the price action and key support levels, as further drops could see ETH testing new lows if the selling pressure persists.