- Whale activity shows short-term accumulation (+171% netflow) but long-term distribution (-2512%), creating conflicting pressure on ETH’s rally.
- Spot markets show persistent sell dominance (90-day CVD), indicating traders exit positions at higher prices rather than accumulate.
Ethereum recently surpassed $3,700, triggering substantial liquidations. This price movement resulted in over $160 million worth of short positions being forcibly closed on Binance alone.
This event followed a similar $195 million liquidation near the $3,500 level. These liquidations represent forced buybacks within a high-leverage environment.
Rallies primarily driven by liquidations often lack endurance. They typically do not stem from strong organic buying demand in regular spot markets. The price increase caught unprepared sellers off guard, but the heightened volatility elevates the chance of a rapid downward move. Consequently, without stronger spot buying activity, Ethereum’s upward movement could weaken. A price retracement becomes more likely if wider market conditions do not support the current rally.
Meanwhile, large Ethereum holder activity presents data that shows Ethereum’s 7-day Netflow, measuring large holder inflows minus outflows, increased by 171.75% recently. This points to renewed short-term accumulation by some major holders. However, the 90-day Netflow figure decreased by -2512.17%. This longer-term metric indicates ongoing distribution by larger entities.
This divergence means while some whales are buying now, the overall trend across three months remains negative. The rally could therefore encounter resistance if broader selling pressure returns. Maintaining upward momentum likely needs a lasting change in long-term accumulation behavior, which current on-chain data has not yet confirmed.
Furthermore, spot market activity reveals persistent selling pressure despite the price jump. The 90-day spot order flow data confirmed Taker Sell Dominant behavior. This means sell orders continued to outnumber buy orders over this period.
This pattern suggests traders are utilizing higher prices to exit positions, not to build new holdings. Therefore, although the price chart looks positive, the rally lacks strong backing from spot market participants.
If selling continues to dominate exchange order books, Ethereum might experience reduced momentum or a decline. This risk increases if speculative interest fades and fails to convert into tangible spot buying.
Derivatives market positioning also adjusted bearishly after the rally. The Long/Short Ratio stood at 0.96 at time of ETHNews analysis. This means 51.01% of positions were short, versus 48.99% long.
This tilt shows traders are positioning for potential downside, possibly expecting a reversal after the short squeeze. Increased short positioning also indicates many anticipate limited further gains at current prices.
Wave Analysis Suggests Continuation Toward $3,900–$4,000 Range
According to a technical Elliott Wave model published July 25, Ethereum appears to be in a wave-based bullish cycle, having completed a corrective pullback from previous highs. The price projection indicates ETH could retest $3,900–$4,000 if current support structures hold.
Key short-term resistance is positioned at $3,660, while immediate support lies at $3,500. A break above the former would likely initiate another leg upward toward the $3,850–$4,000 region. If bearish pressure increases, a retraction to $3,380 is possible.
