Ethereum Caught Between Retail Investors Selling and Whale Purchases, Analyst Discusses

A recent analysis indicates that Ethereum (ETH) is currently in a state of uncertainty. Retail investors are transferring Ethereum to exchanges like Binance, signaling potential selling pressure, while larger investors are withdrawing their holdings, suggesting a trend towards accumulation and confidence in the long-term.

Ethereum in a Battle of Perspectives

As ETH approaches the $2,000 level for the first time since late March, a shift in market sentiment appears to be underway. Optimism surrounds the potential reversal of trends, yet on-chain metrics continue to present conflicting signals regarding Ethereum’s short- to medium-term outlook.

Further Insights

The analysis highlights that Ethereum metrics from Binance are showing ‘mixed signals.’ Short-term data reveals underlying weakness and uncertainty among investors, while longer-term indicators reflect resilience and strength.

Notably, average exchange inflows have surged considerably since the end of 2024, indicating increasing pressure from retail traders looking to sell. This trend mirrors patterns observed in 2022–2023, where a spike in ETH deposited on exchanges preceded significant price drops.

Similarly, average exchange outflows have been rising since October 2023 but are primarily associated with whale wallets—addresses holding large amounts of ETH—indicating that wealthy individuals are accumulating assets rather than liquidating them. This discrepancy highlights a classic conflict between retail investor anxiety and institutional assurance.

The analyst also pointed out the trends in funding rates. He observed that when ETH surged to $4,000 in early 2025, funding rates became excessively positive, reflecting heightened bullish sentiment. This over-leveraging led to a sharp decline, with ETH dropping to $1,400 by April.

Currently, funding rates are stabilizing in neutral territory, suggesting no clear bias towards leverage. The analyst mentioned that if short interest rises and funding rates dip below zero, there could be a short squeeze, potentially driving prices up. However, as of now, such a scenario has not materialized.

Meanwhile, the taker buy/sell ratio, which measures aggressive market orders, indicated significant selling pressure in late 2024 and early 2025, just prior to Ethereum’s notable downturn. This ratio is now stabilizing, suggesting that seller fatigue is setting in and buyers are beginning to regain strength.

Is ETH’s Fortune About to Change?

While ETH has experienced a decline of 34.3% over the past year, various technical and on-chain signals suggest a potential bullish trend reversal for the second-largest cryptocurrency by market capitalization.

Further Insights

For example, Ethereum recently exhibited a golden cross on the daily chart, a bullish signal typically associated with substantial upward movements. Additionally, there are indications that the cryptocurrency may have reached its lowest point for the current market cycle .

Despite this, there remains a level of uncertainty. Recently, a machine learning algorithm predicted that ETH could experience another downturn, potentially bringing its price down to $1,500. At the time of reporting, ETH was valued at $1,966, up 7.8% in the last 24 hours.

Featured image created with stock photography, charts referenced from data analytics platforms.