The broader crypto market crashed, losing over $2 billion in market value and triggering over $470 million in liquidations.
With the market on edge, altcoins saw significant losses, especially with Ethereum [ETH] leading the way. As such, Ethereum breached the lower boundary of its consolidation range and fell to a low of $1844.
As of this writing, ETH traded at $1873, down 5.72% on the daily charts, extending a week-long bearishness.
With Ethereum recording substantial losses, investors, especially whales, panicked and turned to strategic positioning.
Ethereum whale hikes holdings to avoid liquidation
As the market continued to drop, a Matrixport-linked whale panicked and added more funds to his ETH longs. According to Lookonchain, with the continued pile-up, the whale now holds 115,000 ETH, worth $215.4 million.
Typically, when a whale adds more funds to long positions during a downside spiral, it means they paid shorts to avoid liquidation.
In doing so, the whale lowered leverage and reduced liquidation risk. In fact, as ETH fell below $1.9k, liquidation levels rose significantly, especially for long positions.
According to CoinGlass data, Ethereum recorded over $110 million in long liquidations between the 22nd and the 23rd of February.
On-chain monitors recorded one such liquidation: Machibigbrother saw partial liquidation again following the recent crash.
Machi was liquidated across his three positions, totaling 7.9k ETH, worth over $15 million. Despite the liquidation, Machi opened additional long positions and now holds $1.7k in ETH, worth $3.2 million.
Market demand weakens
Besides, as the market dropped, the liquidation rate rose, prompting some investors to panic and close their positions.
In fact, the Buy Sell Volume Pressure to Price indicator from TradingView showed massive capitulation across all participants.
The pressure to price turned negative, falling to a 15, with net pressure also falling into negative territory. A drop for these two into the negative zone indicated the seller’s total market dominance.
Coupled with that, the altcoin’s Demand Index fell again into the negative zone, indicating a bearish trend reversal.
At press time, this indicator sat at -0.14, reflecting weakened buy-side liquidity and strengthened seller dominance.
As a result, Ethereum’s Connors RSI fell deeper into oversold territory, currently at 15.9, further validating sellers’ presence in the market.
Likewise, its DMI ADX smoothing indicator showed strong downward momentum, as the positive index (+DI) dropped to 7. At the same time, the negative index (-DI) remained around 32.
When momentum indicators drop to such lows, they signal strong downside risk and the potential for the trend to continue.
If the prevailing sentiment persists, ETH could see more losses on its price charts, with $1746 acting as a key support level.
However, if the broader market cools down, ETH will hold $1.9k and eye a rebound towards $2k.
Final Summary
- Ethereum [ETH] breached the $1.9k support level and fell to a low of $1844 amid a broader market pullback.
- Ethereum whale continued to add to its long positions, raising its holdings to 115,000 ETH, worth $215.4 million, to avoid liquidation.
