NAIROBI (CoinChapter.com) — Ethereum (ETH) dropped below $1,600 this week as large holders offloaded over 143,000 tokens, triggering renewed concern over short-term price action. However, emerging on-chain data suggests a deeper shift may be underway, with early signals hinting at a potential recovery.
At press time, ETH traded near $1,594.40 It surged by 0.63% in Thursday’s early Asian session, extending losses that began after the Dencun upgrade disrupted Ethereum’s value accrual model.
Large Holders Send Mixed Signals
On-chain analyst Ali reported that whales offloaded 143,000 ETH in the past week. This sell pressure coincided with price weakness and growing caution among retail traders.
IncomeSharks, a trader on X, highlighted the risk of holding through dips without profit-taking. “Minus one entry all of these buys offered great chances to take profits (I didn’t),” they admitted.
Addresses holding over 100 ETH resumed accumulation over the past week. Historically, such behavior has preceded trend reversals, as these entities often lead broader market movements.
Ethereum Faces Critical Price Test
Data from IntoTheBlock identified $1,528.50 as a key support level. Over 4.82 million ETH was bought at that price by 2.61 million addresses. Losing this level could open the door to further declines.
Still, technical analyst abramchart suggested ETH may be entering a historical buy zone. The token is trading close to its realized price and approaching the lower band of its long-term valuation range.
These bands have historically marked periods of undervaluation. “Every major ETH bull run began near or below the lower band,” abramchart wrote. A bounce here may signal a new uptrend, while a breakdown could confirm further weakness.
ETH/BTC Bullish Cross Hints at Momentum Shift
Ethereum’s ETH/BTC pair is flashing early signs of a momentum reversal. A bullish cross between short- and long-term moving averages suggests the potential for a breakout, according to technical analysts. Historically, such crossovers have preceded strong rallies in Ethereum, even during broader market uncertainty.
Niels, a Web3 market observer, noted that ETH/BTC is now trading lower than it did during the March 2020 crash, despite Ethereum’s U.S. dollar pair retesting 2018 highs. He also pointed out that the weekly RSI on ETH/BTC is the most oversold since inception, underscoring the extreme bearish sentiment. “Even ETH OGs are dumping,” he said, while emphasizing that stablecoin market cap and institutional adoption continue rising.
The divergence between price action and fundamental metrics could support a rebound, especially if broader risk appetite improves. Combined with ongoing whale accumulation and a reduction in seller activity, the ETH/BTC bullish cross strengthens the case for a near-term reversal.
Value Accrual Remains a Core Concern
Ethereum’s macro picture remains complicated. A recent report by Binance Research noted that the network’s shift to a data availability model after the Dencun upgrade weakened ETH’s value capture.
Layer-2 networks now enjoy vastly improved scalability while paying minimal fees to the Layer-1 chain. As a result, Ethereum’s fee revenue—once central to its “ultrasound money” thesis—has fallen, allowing competitors like Solana and BNB Chain to capture more value.
While based rollups such as Taiko have helped contribute more fees to Ethereum, they are not included in the next two protocol upgrades: Pectra (May 7) and Fusaka (Q4 2025).
Network Fees Hit Lowest Level Since 2020
Meanwhile, network fundamentals show signs of improvement. According to Santiment, Ethereum’s average transaction fees fell to $0.168—marking a four-year low.
The drop reflects better scalability and reduced congestion. Analysts attributed the improvement to Ethereum 2.0 developments and Layer-2 adoption. Lower fees could attract more users and developers, boosting network activity and potentially supporting long-term demand for ETH.
Despite the bearish sentiment from whale dumping and weak value accrual, Ethereum’s broader outlook remains contested.
Key support at $1,528 holds for now. Whale accumulation and a bullish ETH/BTC crossover could provide the setup for a trend reversal. At the same time, historically low fees and improved scalability create a more favorable network environment.
ETH’s short-term path may hinge on whether it holds the realized price range. A failure would confirm weakness—but if bulls step in here, a rebound could follow.
