Ethereum Price Risks Crash to $2,500 Amid Sustained Wintermute Dumping

Ethereum price dropped below the key support at $3,000 on Tuesday, down by ~40% from the year-to-date high. This crash will likely continue to accelerate in the near term as it has formed a highly bearish pattern and as Wintermute continues selling. 

Ethereum Price at Risk Amid Increased Wintermute Selling

ETH token price has continued falling this week as demand weakened and large investors sold. One of the top sellers is Wintermute, which dumped millions of tokens in the past few weeks, leading to concerns that it is manipulating the market.

As the chart below shows, Wintermute sent tokens worth over $17 million in the last four hours. 

Other large companies have also dumped Ethereum in the past few weeks. Some of the most notable ones are ETF firms like BlackRock, Grayscale, Fidelity, and Bitwise. They have dumped that token because of the recent Ethereum ETF outflows, which have remained at an elevated level this month.

Data compiled by SoSoValue shows that spot Ethereum ETFs have had outflows of $416 million this month and $1.42 billion in November. These outflows have led to cumulative inflows of $12.5 billion, down from the year-to-date high of over $15 billion.

Meanwhile, Ethereum futures open interest has dropped sharply in the past few months, moving from the year-to-date high of over $60 billion to the current $39 billion. 

Falling open interest is a sign that investors are reducing their leverage in the crypto industry. It is also a sign that demand has continued falling in the past few weeks, which is happening this week because of the Christmas holiday.

Still, on the positive side, Ethereum has some potential bullish catalysts that will help it rebound in the coming months. One of them is the ongoing accumulation by BitMine, which is aiming to hold 5% of the supply. The company now holds 3.6% of the supply today  

Ethereum has continued to benefit from the recent Fusaka upgrade, which has helped it become the biggest player in key areas like decentralized finance and real-world asset tokenization. For example, JPMorgan selected it as the network of choice for its first onchain money market fund.

ETH Price Technical Analysis 

The daily timeframe chart reveals that the ETH price has dived since August when it jumped to a record high of $4,960. It crashed to a low of $2,622 on November 21.

The token has formed a major death cross pattern as the 100-day and 200-day Exponential Moving Averages (EMA) crossed each other.

Worse, the token has moved below the 50% Fibonacci Retracement level and is now forming a bearish flag chart pattern. It has already moved below the lower side of the flag’s channel.

Therefore, the most likely ETH price prediction is bearish, with the first target being at $2,622, its lowest point on November 21. A drop below that price will point to more downside to the psychological level at $2,500.

The bearish outlook will become invalid if it moves above the 200-day moving average at $3,400.