Over the past 24 hours, the cryptocurrency market’s second-largest asset by market cap, Ethereum (ETH), has plunged roughly 7 %. This sharp drop has not only rattled investor sentiment but has also triggered heightened profit-taking and loss realization among market participants — raising alarms that a more aggressive wave of selling could be imminent.
Escalating Pressure from Profit Taking and Loss-Realization
Data from on-chain analytics firm Santiment indicate that since the weekend, investors have locked in over USD 500 million in profits, while simultaneously realizing around USD 100 million in losses.
In protracted downtrends, rising loss-realization is considered a red-flag: historically, once such metrics accelerate, it often heralds stronger distribution and deeper price declines.
This dynamic suggests that many traders are not only taking chips off the table but also cutting losses — a combination that constrains upward momentum and may lead to cascading liquidations if sentiment worsens.
Nearing the Key Cost-Basis of Large Holders
Another layer of concern: ETH is approaching the average cost basis of whales (addresses holding between 10,000 – 100,000 ETH) in the vicinity of USD 2,900.
Historically, when price breaks below such major cost zones, large-scale holders may feel the need to exit or reduce exposure, triggering accelerated supply into the market.
Compounding this, while these whales had been quietly accumulating (around 890,000 ETH in recent weeks) and thus providing a sort of support floor, a loss of conviction or a shift in strategy could remove that “support wall” and open the door to steeper declines.
Technical Landscape: Bearish Signals Gaining Strength
From a technical perspective, ETH is showing warning signs:
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It has failed to break above its 200-day Exponential Moving Average (EMA), a key long-term trend indicator.
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Futures data from Coinglass show approximately USD 206.5 million in positions liquidated in 24 hours — of which around USD 155.3 million were long contracts.
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Support around USD 3,100 is currently on the line; if it breaks, the next major level is seen near USD 2,850.
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Momentum indicators such as RSI are below neutral and heading downward; stochastic oscillators are nearing oversold territory — while that could set up a bounce, it also shows the downside momentum remains dominant.
What Could Happen Next?
Given the convergence of structural, on-chain, and technical signals, several scenarios are plausible:
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If ETH holds the USD 3,100 zone and rebounds above the 200-day EMA, we might see stabilisation and an attempt to consolidate toward the upside.
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On the flip side, if the support breaks and large-holder cost-basis thresholds are breached, a cascading sell-off could follow — driven by stop-loss triggers, leveraged funds closing out positions, and weakened accumulation interest.
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Events external to ETH — such as broader crypto market weakness, adverse macroeconomic news, or regulatory headwinds — could act as catalysts that shift the setup into the riskier scenario.
Key Takeaways for Investors
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The current environment suggests elevated risk of a sharper drawdown in ETH, rather than a smooth upward replay.
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Loss-realization metrics and whale behaviour are flashing caution signals — they’re not guarantees of crash, but they significantly raise the odds of one.
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Technical structure is fragile: Without a meaningful reversal above the 200-day EMA and support near USD 3,100 holding firm, downside risk is amplified.
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For traders and investors, this is not the scenario to assume a free ride upward. Instead, prudent risk management — including clear stop-loss levels, position sizing, and monitoring of on-chain metrics — should be top of mind.
Conclusion
While ETH remains a cornerstone of the crypto ecosystem and retains long-term potential, its current short-term technical and on-chain setup is signalling danger rather than opportunity. With mounting profit-taking, rising loss-realisation, and the price hovering near critical cost zones of large holders, the risk of a stronger liquidation phase is real.
Investors should remain vigilant, avoid complacency, and perhaps prepare for a range of outcomes — including those that may play out faster and more violently than expected.
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