Ether Faces 52% Drop, Whale Accumulation May Prevent Further Decline

Ether, the world's second-largest cryptocurrency, is facing a critical juncture as analysts warn of a potential fall below the $1,900 demand zone. This zone, identified as "robust" by onchain metrics, has historically seen significant buying activity, with around 4.3 million ETH purchased in the $1,848–$1,905 range. If Ether breaches this level, it could trigger a wave of selling, known as capitulation, where investors panic and sell their positions, leading to a significant price decline.

Ask Aime: What is the potential impact of Ether breaking the $1,900 demand zone on the cryptocurrency market?

Capitulation, while initially detrimental, often signals an imminent market bottom and the start of the next uptrend. In Ether's case, this could catalyze a recovery from its three-month downtrend, during which its price fell over 52% from a peak above $4,100 on December 16, 2024. However, the risk of capitulation increases if Ether falls below the $1,900 level, as demand beyond this zone appears much thinner.

Despite the potential for a temporary correction below $1,900, analysts believe that Ether is unlikely to fall much lower due to growing whale accumulation. Whales, or large investors, have been accumulating Ether, and substantial amounts of ETH are held by these large players and institutions. This behavior was also seen in recent options data, where larger players were positioning themselves for moves in either direction, indicating market uncertainty about Ether's future price movements.

Whale addresses with at least 1,000 ETH or $1.92 million have started staging a recovery since the beginning of 2025. The number of these addresses rose over 4% year-to-date, from 4,652 addresses on January 1 to over 4,843 addresses on March 14. This accumulation by whales suggests that there is significant interest in Ether, which could support its price and prevent a further decline.

In conclusion, while Ether faces the risk of falling below the $1,900 demand zone and potential capitulation, the growing whale accumulation and historical buying activity in this zone suggest that a significant price decline is unlikely. Instead, this scenario could catalyze a recovery from Ether's three-month downtrend and signal an imminent market bottom. However, the market remains uncertain about Ether's future price movements, and investors should proceed with caution.