Ethereum Price Drops as Investors Book Profits and Losses
Ethereum (ETH) price fell 7% on Thursday. This drop led investors to take profits and realize losses. Prices moved close to the cost basis of large holders, called whales. Since Sunday, Ethereum investors booked over $500 million in profits and $100 million in losses, according to data from crypto analytics platform Santiment.
Loss Taking Could Lead to Bigger Price Drop
Investors have increased selling this week. Profit-taking and loss realization grew as prices stayed low amid economic pressures. Loss realization is a key metric during market drops. When it rises, it often triggers heavy selling and price falls.
For example, Ethereum traded between $3,200 and $3,500 in late January. Then, loss taking rose and pushed prices down more than 50% in three months. Currently, prices are nearing the average cost basis of whales holding 10,000 to 100,000 ETH. This level is near $2,900. If prices fall below this, whales may sell to stop losses, adding selling pressure.
These whales have been key buyers recently. They increased their holdings by 890,000 ETH during the recent price decline, helping to absorb selling. If they stop buying, the price drop could speed up. Most recent selling comes from retail investors and holders with coins under 90 days old.
On the derivatives market, open interest remains low. It has not risen above 12 million ETH since the leverage drop on October 10, according to Coinglass data. Open interest measures the total value of open contracts.
Meanwhile, a major Ethereum whale has been using leverage to buy ETH. Since November 4, this whale accumulated about $1.3 billion worth of ETH.
Ethereum Faces Key Support Near $3,100
Ethereum saw $206.5 million in futures liquidations in the last 24 hours, mostly from long positions, per Coinglass. ETH is near the $3,100 support after failing twice at the 200-day Exponential Moving Average (EMA).
If Ethereum cannot hold $3,100, it may drop further to the key support at $2,850. To start recovering, ETH must rise above the 200-day EMA. The Relative Strength Index (RSI) is trending down below neutral. The Stochastic Oscillator is close to the oversold area, signaling potential for a price rebound.
