What led to the sharp decline of Ethereum?
Crypto Chaos: Ethereum Plunges Amid Whale Shenanigans and Market Volatility
In the last few weeks, Ethereum (ETH) has taken a major hit, dipping below the $2,000 threshold and prompting panic among investors. Behind the scenes, some cunning whales are playing a dangerous game, exploiting market uncertainty to their advantage.
On March 28, 2025, ETH plummeted to an alarming low, with on-chain data indicating that large investors (whales) have been selling off millions of dollars worth of ETH, crashing the market. The crypto market showed some recovery over the past 24 hours, with the total market cap surging past $3.04 trillion and trading volume increasing to over $151 billion. However, the Fear and Greed Index, which measures investor sentiment, currently stands at "Fear," and Bitcoin's performance has been relatively modest, gaining around 3% during this period.
Old Wallets Stirring Trouble: Ethereum Flows to Exchanges
Data from SpotOnChain reveals that an old investor wallet associated with the Ethereum Foundation moved 1,001 ETH (around $1.5 million) to the Kraken exchange after being dormant for six years. This wallet has since sold a whopping 12,890 ETH (around $21 million) at an average price of $668. What's even more concerning is that these ETH were originally purchased at a mere $1.2 each, and there are still approximately 28,000 ETH (around $44 million) left in the wallet.
Another large investment firm, Paradigm, transferred 5,550 ETH (around $8 million) to Anchorage Digital, marking the first time their corporate broker platform has been active in nine months. The average selling price for these transactions was around $3,109.
Related: 3 Bullish Signals That Could Send Ethereum (ETH) Skyward
Pleased as Punch with the Dip, Then Short-Sighted Losses
According to data from LookOnChain, another whale sold 2,560 Ethereum (around $3.2 million) at $591 each, closing their position. They then opened a 10x short position on the Hyperliquid platform against the Ethereum price. The result? Ethereum lost around 5% of its value over the past 24 hours, but has since partially recovered.
On Tuesday morning, ETH price fell from around $650 to $557. Since the start of the year, it has dropped a staggering 50% of its initial value. At the time of writing, Ethereum is trading at an average price of $623. The 24-hour trading volume has seen a significant leap of 32%, reaching $15.5 billion.
According to CoinGlass data, approximately $70 million worth of long and short positions on Ethereum were liquidated in the last 24 hours. A whopping 73% of these liquidations, totaling about $51 million, were long positions, suggesting that investors were expecting a recovery but the trend reversed as whales started selling.
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Enrichment Data:
The deteriorating situation in Q1 2025 for Ethereum was a result of complex whale activities, showcasing both bearish and opportunistic behaviors. Here's a breakdown of key developments and their potential market implications:
Market Downturn and Whale Discord
Ethereum nosedived a whopping 45% in Q1 2025, obliterating $170 billion in market value and hitting a brief low of $1,448 in early April[2][5]. While many large investors exited during this period, selling a whopping 760,000 ETH between February and March[5], others seized the opportunity to accumulate a cool $90 million worth of ETH at the lowest price levels[2][4].
Whale Strategies in Volatility
- Bearish Exits: The 63.8% reduction in large transaction volume by late March suggested a loss of institutional interest, which contributed to ETH's struggle to maintain its value above $1,800[5].
- Bullish Accumulation: Speculative investors opened a $47.59M long position (32,875 ETH at $1,461.61) on April 7, while the "Seven Siblings” entity added 24,817 ETH ($42.2M) despite earlier $64M losses[2]. Their wallets now hold over $603M in ETH[2].
Q1 Wreckage vs. Q2 Indications
The cumulative effects of Q1 sell-offs exacerbated bearish sentiment. However, April 2025 marked a significant shift:- ETF Inflows: After an eight-week hiatus, these resumed, aligning with a 2682% surge in whale accumulation[3].- Technical Momentum: A golden cross formation and a recovery in on-chain activity (especially among AI-driven dApps) fueled speculation of a push toward $2,000–$3,250[1][4].
Market Sentiment and Projections
While the exit of whales in Q1 intensified downside risks, the consistent accumulation in Q2 suggests a growing confidence in Ethereum's infrastructure upgrades and AI integration. Analysts remain divided, with short-term targets ranging from a grim $610 (bear case) to a bullish $10,000 (bull case) by the end of the year[5][4]. The resurgence of whale activity in late April could signal a turning point if it persists[1][3].
- Some investors, including those associated with the Ethereum Foundation, have been shifting large amounts of Bitcoin (ETH) to exchange platforms like Kraken, selling millions of dollars worth in early 2025.
- In March 2025, a whale sold 2,560 Ethereum (ETH) and opened a short position on the Hyperliquid platform, potentially contributing to a 5% drop in ETH value over a 24-hour period.
- Despite the volatility, cryptocurrency finance saw significant activity in Q2 2025, with Ethereum ETF inflows resuming and a 2682% surge in whale accumulation.
- As of 2025, the total market cap for cryptocurrencies is worth over $3.04 trillion, with Ethereum trading at an average price of $623, but the Fear and Greed Index indicates a cautious stance among investors.
