Is Ethereum Headed for a Big Correction?

TL;DR

• Big Ethereum investors cut their collective holdings to 15.4 million tokens following a massive sell-off this week.
• However, analysts still see upside potential, with chart signals hinting at a push above $5K this month if momentum holds.

Taking Profits

Ethereum’s (ETH) price has been hovering around $4,500 in the past two days, or performing better than at the beginning of September when it briefly dipped below $4,300.

Large investors (known as whales) seem to have seized the opportunity and sold some of their holdings within that period. The X user Ali Martinez revealed that these market participants dumped 90,000 ETH, worth over $400 million.

The collective possessions of that investor group have lessened to 15.4 million tokens, representing 12.7% of the asset’s circulating supply. 

Selling efforts of that type are generally considered bearish since they increase the amount of coins on the open market and could trigger a price decline (assuming demand stays the same or heads south). Furthermore, smaller players may mimic the whales’ actions and also exit the ecosystem. 

It is important to note that the upcoming FOMC meeting (during which interest rates in the US are expected to be lowered) might have prompted big investors to reduce their exposure. The event, scheduled for today, is interpreted as bullish in the long term for the crypto market, but may result in a short-term correction (as some X users suggested).

Price Targets

Despite the offloading by whales, numerous analysts remain optimistic that ETH can post additional gains in the near future and even hit a new all-time high as early as this month.

X user ZYN spotted the formation of a bullish cross on the asset’s price chart, reminding that double-digit pumps followed such setups in the summer. 

“If a bullish cross plays out again, ETH will trade above $5,000 this month,” they predicted.

Ted chipped in, too, making a more modest prediction. He noted that ETH has recently bounced back from its $4,500 support zone, envisioning an ascent to $4,700 if this level holds.

“In case of a breakdown, ETH will revisit the $4,000-$4,200 region,” he added.