Ethereum drops 7% to $1,600 as exchange inflows point to whale selling

Ethereum is on track to retest $1,400 after exchange inflows surged and macro conditions deteriorated, on-chain data shows.

Ethereum fell 7% over the past seven days to $1,600, losing the level as exchange inflows rose and whales positioned to increase selling pressure, CryptoQuant data shows.

"Whales typically wait for the price to recover before resuming their dump," Alejandro Arrieche, a crypto analyst specializing in technical analysis, said. "We might expect ETH to rise to $1,700, at which point the downtrend should resume."

Trading volumes climbed 30% in the past 24 hours, now representing 9% of the asset's circulating market cap, according to CoinGecko. Exchange inflows have been rising since early May, a pattern that suggests token holders may be preparing to offload ETH. Investors have also pulled funds from exchange-traded funds for five consecutive days, with $220 million withdrawn from these vehicles during that period.

The selloff reflects a shift in macro conditions. The odds of a 25 to 50 basis point rate increase in September have risen beyond 60%, according to FedWatch data, after annualized inflation hit 4.2% — more than double the Fed's 2% target. The Crypto Fear and Greed Index sits at 16, indicating "Extreme Fear." On the daily chart, the rejection above $1,800 last week confirmed sellers remain in control, with the Relative Strength Index dropping to 30. The next key support sits at $1,400, the April 2025 lows.

The macro backdrop has turned increasingly hostile for risk assets. Fed Chair Kevin Warsh said inflation for the central bank is a "choice," a statement the market interpreted as a willingness to raise rates further. Higher rates typically push investors toward lower-risk instruments and shrink liquidity as financing costs increase. Bitcoin has also felt the pressure, with the broader crypto market cap declining as the selloff extends beyond ETH.

Despite the bearish near-term outlook, some analysts see a floor forming. ETH sent a historical buy signal on the weekly chart that has marked the end of previous bearish cycles with high accuracy, according to the analysis. Long liquidation volumes at current levels are shrinking, which suggests selling pressure may be exhausting near $1,400.

"If selling pressure from whale deposits continues, ETH could break below key support levels and trigger a broader sell-off in the altcoin market, potentially dragging the overall crypto market cap lower," the analysis noted.

This article is for informational purposes only and does not constitute investment advice.