Ethereum took a massive hit recently. Prices plummeted 43% between late January and early February.
Most regular investors panicked and sold everything. But if you look closely at the data, the biggest players did the exact opposite.
Let’s break down what these major investors are doing right now. Plus, we’ll look at why a major market recovery might finally be starting.
The $7 Billion Leverage Flush Nobody Noticed
The recent crypto crash wiped out a massive amount of borrowed money. In fact, total open interest dropped from $15.9 billion to $8.73 billion. That equals a brutal $7.17 billion leverage flush.
So, what does this mean? Basically, exchanges forced risky traders out of their positions. This usually happens during sharp price drops.
Yet, while amateur traders ran for the exits, Ethereum whales swooped in. These major players quietly grabbed 8.91 million ETH. At an estimated average price of $2,100, that translates to roughly $18.7 billion in fresh accumulation. Clearly, the big money isn’t scared.
Long-Term Holders Return to Market Accumulation
Whales alone don’t guarantee a market recovery. We also need to see confidence from long-term holders.
At first, these experienced investors hesitated. But the mood shifted dramatically by late February. On February 24 alone, long-term investors scooped up 9,454 ETH.
Meanwhile, exchange flows paint a similar picture. Investors are moving massive amounts of ETH off public exchanges and into private wallets. For example, over 227,000 ETH left exchanges in just one single day.
Plus, short-term holders are officially tapping out. Their share of the total Ethereum supply dropped from 3.2% down to 2.1%. Thus, the weak hands are gone, leaving mostly strong hands behind.
Relative Strength Index Shows a Bullish Divergence
The price charts are finally starting to reflect this massive buying spree. Specifically, the Relative Strength Index (RSI) is flashing a rare warning sign for bears.
Even though Ethereum’s price formed a lower low recently, the momentum indicator formed a higher low. Traders call this a bullish divergence. So, the selling pressure is actively dying down.
We saw a similar signal earlier in February. However, it failed because long-term buyers weren’t ready. Now, whales and veteran holders are buying together. Therefore, this technical setup looks much stronger.
Watch These Critical Resistance Levels Now
Ethereum is currently testing a crucial recovery zone. First, buyers need to push the price past the $1,990 resistance level.
If they succeed, the next major target sits at $2,050. Breaking above $2,240 would confirm a true structural bottom. That would mean a solid 20% jump from recent lows.
Still, we have to watch the downside risks. If the price crashes below $1,740, this whole bullish theory falls apart. That would mean the broader downtrend is still completely in charge.
These market signals rarely line up this perfectly. The combination of wiped-out leverage and massive whale buying creates a powerful setup.
If you hold Ethereum, this data should give you some comfort. The smartest money in crypto clearly believes the worst of this crash is over.
Keep a close eye on those key price levels this week. The next major move will tell us if this is a true market bottom or just a temporary pause.