Ethereum Price Plunges, Whales Buy the Dip – Signs of a Strong Recovery

A Steep Slide, but Whales Stay in the Game

Ethereum just closed out a brutal week — down over 15%, with Friday’s Trump-induced shockwave accounting for the sharpest losses. Yet, amidst the carnage, a curious recovery blueprint is quietly forming.

Data from the order books reveal that whales poured in roughly $45 million in net spot inflows over the past 24 hours — a bold bet amid chaos. Even more telling: they opened about $3.3 billion in long ETH derivative positions. That’s not just optimism, it’s conviction.

By contrast, Thursday saw the deepest spot outflow in recent memory — $677 million drained from ETH markets. In the following day, outflows pared back to $234 million, hinting at a cooling panic.

In short: the shakeout appears to be stabilizing, and significant players may be preparing for the next swing.

Technical Anchors: Support Holds the Line

ETH’s price behavior has been tethered to a well-worn ascending trend line since April — a line that’s served as a rebound point after every major drawdown this year.

When the crash on Friday sent ETH down to ~$3,510, it found support and rebounded to ~$3,741. Key here: ETH’s RSI formed a bullish divergence — the price’s local low was lower, but its relative strength index (RSI) was higher than its prior low in September. That’s a classic signal that buyers are inching back in.

If the bulls hold this trend line, there’s room for a sharp bounce back.

Why Some Believe the Bull Story Isn’t Dead

Crypto strategist Dan Gambardello argues that it’s unlikely institutions would pour in liquidity only to abandon ship at the first crash. The strength and timing of recent inflows suggest long-term positioning, not fluke trades.

He also notes a parallel between ETH’s current pattern and its behavior in August–September 2020 — a consolidation phase that led into a powerful run. If history rhymes, we could be gearing up for a fresh bullish leg.

Meanwhile, exchange reserves of ETH are hitting multi-year lows — now down to ~15.9 million coins — indicating continued outflows from exchanges. Less supply on exchanges tends to favor upward pressure, especially if demand returns.

Lastly, the scale of the “flash crash” suggests more than random volatility. Some addresses netted over $72 million profit via short trades timed to perfection — raising red flags about smart money and insider plays.

Risks That Could Spoil the Bounce

If support around the $3,700–3,825 zone cracks, ETH could bleed further.

The broader market’s sentiment shift — especially toward equities and rates — may drag crypto lower.

Aggressive policy changes, geopolitical risk, or a strong USD rebound could all undercut momentum.

Scenarios to Watch

A strong bounce could rapidly test upper resistance — but a break below support would force a deeper reset.

Final Take

Ethereum’s tumble last week was harsh — but not fatal. Whales are positioning, trend lines are holding, and on-chain flows hint at renewed interest. The next few sessions will be crucial: a validated bounce could fuel a compelling rally, but a breakdown would demand serious caution.

If you’re playing for the rebound, watching volume, support holds, and reaction to broader macro risk will make all the difference.

Quick FAQs

1. Why did ETH lose 15% in one week?
The sharp drop was triggered by the Trump-induced market shock, followed by heavy derivative liquidations and mass outflows.

2. Can ETH recover quickly from here?
Yes — if support around ~$3,700 holds and large buyers continue to accumulate.

3. Which technical signal points to recovery?
A bullish divergence on RSI and the consistent bounce off the ascending trend line suggest potential strength.

4. What’s the most dangerous breakdown level?
If ETH breaches ~$3,700–3,825 decisively, it may trigger deeper losses and invalidate the rebound thesis.