Ethereum is now facing increasing selling pressure after failing to defend the crucial $2,150 level.
At the time of writing, Bitcoin is at $2,132.32, up 0.18% since it opened early Tuesday in Asian trading.
The drop comes as the crypto market returns to volatility, coupled with unusual activity from ‘whales’ or large Ethereum holders.
According to CryptoOnchain data, more than 225,000 ETH were transferred to Binance in a single day, making it the largest inflow to the exchange since 2022.
This situation is considered worrying because such a large amount of ETH is usually stored in cold wallets and is rarely moved except for specific purposes.
Analysts see three main possibilities behind this massive move.
First, whales may want to take profits after Ethereum recorded an increase since the February drop. If a lot of ETH is sold at once, it could put significant pressure on the market price.
The second possibility is portfolio rebalancing activity. Institutional investors may be moving their assets to exchanges to change their investment strategies in increasingly volatile market conditions.
Third, ETH may be used as collateral for highly leveraged derivative positions. While not necessarily bearish, the use of leverage can increase the risk of aggressive price movements if the market moves against it.
Whatever the reason, the influx of 225,000 ETH into Binance signals that previously dormant Ethereum supply is now available for sale or use in the market.
This could increase selling pressure and cause more wild price movements in the near term.
ETH is also still well below its 200-day moving average, indicating that the overall trend is still weak despite previous attempts at recovery.
The $2,050 to $2,100 level is now a key support zone.
If Ethereum fails to hold here, the price could potentially fall back to the $1,900 to $2,000 zone, where buyers previously re-activated after the big drop in February.
