Ethereum retested the $3k support a few hours ago as the crypto market experienced another wave of selloffs. It retraced from $3,266 to a low of $3,045 in one hour.
The coin has since rebounded and is trading slightly above its low. Nevertheless, the altcoin may end the day with losses of almost 5% amid the rebound.
The 1-day chat indicates that the recent decline is a continuation of the previous day’s downturn. ETH retraced by over 2% during this period, slipping below $3,200 before rebounding.
However, some key indicators flipped bullish amid the two-day downtrend. JA_Maartun spotted a rise in net taker volume on Binance. He noted the increase was not significant but better than the previous reading, citing that further increases in this metric will result in an equal price reaction.
The increase in taker volume also indicates growing convictions that the large-scale downtrend has ended. As a result, the whales are reentering the market.
Several market observers noted that one large market player opened new long positions in the early hours of Friday.
The whale opened the positions with $616 million across three assets. However, he placed $490 million on Ethereum. His actions have since sparked speculation about why he made such large trades and if he knows something others don’t.
The large player in question was the most profitable trader during the 10/10 dip, closing the trade with $200 million profit. Since this action, other investors have suspected he’s an insider and have since followed his trade.
Why Did He Go Long on Ethereum?
While the whale has not publicly stated his reasons for the action, several speculations have emerged. One such possibility is that, as an insider, the US government might be planning to roll out a new policy that could trigger further price recovery.
While this is plausible as the whale timed several entries with precision to such periods, the incoming policy change is not hidden. Last month, the Federal Reserve chairman announced the end to quantitative tightening, which earned significant applause from crypto investors.
They believed that ending QT would lead to further capital inflows into the market. However, others stated that ending the policy is not enough; a buyback must occur. The recent FOMC meeting concluded with Jerome Powell announcing the rate cut and adding that the buyback will start in two days.
Following the events, recent reports stated that the buyback has begun, marking the start of what would become a monthly action by the feds. However, prices failed to react to the latest action as news of the Bank of Japan’s plans to hike rates gained center stage.
It remains to be seen when prices will react. Nonetheless, another key event occurred, indicating that the bottom is in. ETH is trading close to the realized price for holders with up to 100k units. Such actions have occurred only 4 times in the last 5 years, and prices have rebounded in all instances.
In hindsight, Ethereum is edging closer to the end of the week without any significant price improvement amid the Federal Reserve’s dovish stance. Volatility may resume next week.
Get Trending Crypto News as It Happens. Follow CoinTab News on X (Twitter) Now
