The Ethereum price has fallen by almost six percent in the last 24 hours and by almost 13 percent in two days overall. This continues the volatile development in January. The price briefly fell below important levels. This raises doubts again about whether buyers will regain control.
But in the background, large holders have been buying heavily. Whales have purchased around 360 million USD worth of ETH when the price dropped. A recovery seems possible, yet the smart money, meaning informed traders, are not fully convinced yet.
Triangle pattern and bullish divergence meet strong supply zone
Ethereum is currently moving in a symmetrical triangle on the daily chart. Sellers have recently rejected the price around January 14 near the upper trend line. Now the price is testing the lower boundary. Can buyers now prevent another crash?
The momentum provides an important clue. From November 4 to January 20, Ethereum reached a lower low, but the RSI formed a higher low. The RSI measures momentum and compares gains and losses. This bullish divergence shows that selling pressure is weakening, even as the price tests support.
Such signals were important in the past. At the beginning of January, a bearish divergence in the RSI preceded a price weakness. Now the opposite is forming. This could indicate a possible reversal instead of a continuation of the trend.
However, a possible increase meets a clear resistance. The cost data shows a strong supply zone between about 3,146 USD and 3,164 USD. Approximately 3.44 million ETH were bought in this zone.
Many holders are almost at breakeven in this area. This often makes the zone a strong resistance. A real price increase needs to break through this zone to show strength and confirm the trend reversal that the RSI indicates.
Whales buy the dip – smart investors wait
Whales are currently trading very decisively. When Ethereum fell by about 13 percent (between January 19 and 21), whale holdings increased from about 103.42 million ETH to about 103.71 million ETH. This corresponds to nearly 360 million USD that were purchased in this range. Such behavior has been observed before.
Similar purchases by whales also occurred around January 14, shortly before a strong price jump. Additionally, Ethereum whales have been buying more in the last few hours.
This steady accumulation shows that, from the perspective of whales, the downside risk in this area is limited. Whales willingly take in new ETH when weakness is felt in the market.
Smart Money, however, sees it differently.
The Smart Money Index, which shows the positioning of informed investors, is currently still below its signal line. Typically, Smart Money acts early and strongly before longer increases. In December, when the indicator rose above the signal line, the Ethereum price recovered by about 26 percent in ten days. A similar situation occurred at the end of December, when a price increase of 16 percent followed until mid-January.
This signal is currently missing. Smart Money seems to be waiting for proof that the resistance is really overcome. The strong supply zone above the current ETH price is likely a reason for the hesitation. Therefore, it seems quite reasonable to wait until the supply is absorbed.
Ethereum price: This zone is now crucial
At the moment, everything is focused on a narrow price range.
The first important level that Ethereum needs to reclaim is at 3,050 USD. Ethereum lost this often-tested support during the last sell-off. A daily close above would indicate initial stabilization.
Above that, everyone is watching the area around 3,160 USD. This level has been tested multiple times and lies precisely at the supply zone from the cost data analysis. A clear daily close above would be an increase of about six percent from the current price. Above all, it would break a heavy resistance and could attract Smart Money again. Then the setup for a reversal would have a real chance.
If that happens, the movement could quickly gain momentum. A confirmed breakout opens the way towards 3,390 USD. There, a larger bullish reversal could develop.
On the downside, the loss of the lower triangle support at around 2,910 USD weakens the assumption of a recovery. A sustained break at this point makes 2,610 USD the next important support.
While sellers of Ethereum have recently achieved a victory, the battle is not over yet. Large owners (whales) are already preparing for a potential price increase. However, experienced investors are still waiting for clarity. If Ethereum surpasses the 3,160 USD mark, hesitation could quickly turn into new momentum.
