Ethereum Price Analysis: Vitalik’s Network Updates Disrupt ETH Markets as Whale Demand Plunges 22% in January 2025

Ethereum price plunged below $3,150 on Saturday Feb 1 as crypto markets retreated after a volatile week, on-chain data trends suggest declining whale demand for ETH could exacerbate the market dip in the days ahead. 

Ethereum Price Struggling to Hold $3,100 Amid Market Retreat

Ethereum (ETH) faced a sharp downturn on Saturday, mirroring a broader market decline that erased gains seen earlier in the week. ETH fell approximately 6% to trade below the crucial $3,150 mark, as risk-off sentiment spread across digital asset markets.

The decline in ETH price follows a volatile week, where macroeconomic factors such as Federal Reserve policy expectations and mixed economic data influenced investor sentiment. The broader cryptocurrency market also saw major losses, with Bitcoin dropping below $102,000 and other leading altcoins facing similar sell-offs.

Ethereum, which had shown resilience earlier in the week by reclaiming the $3,300 level, ultimately failed to sustain its momentum amid increased selling pressure.

MoemntEthereum’s technical indicators suggest that the $3,100 level is a critical support zone. If this threshold is breached decisively, ETH could see further declines toward the psychological $3,000 level, where buyers may look to step in.

Ethereum Whale Demand Plunges by 22% as Network Updates Disrupt Market

The decline in Ethereum’s price has coincided with a significant drop in whale activity. Large transactions, often used as a proxy for institutional and high-net-worth investor participation, have fallen sharply

in January. Ethereum whale transaction counts peaked at 1,741 during the month, marking a 22% decline from December’s peak of 2,245. More concerning, the figure continued to slide toward 1,571 by January 31, according to on-chain data.

This trend suggests that major investors may be reassessing their exposure to ETH, particularly in light of recent discussions surrounding Ethereum’s network updates.

Vitalik Buterin’s recent statements regarding the network’s roadmap have introduced uncertainty, prompting some traders to take a wait-and-see approach. Historically, major protocol upgrades or discussions around them have led to short-term volatility as the market digests potential impacts on transaction costs, scalability, and staking mechanisms.

Whale demand is a crucial factor in maintaining liquidity within Ethereum’s ecosystem. Large holders provide much-needed market liquidity.  By absorbing selling pressure, it allows panic sellers to exit with minimal negative impact on ETH prices. Hence, the recent decline in whale participation, therefore, raises concerns about Ethereum’s ability to withstand further downward pressure if the poignant market sentiment persists.

The simultaneous drop in Ethereum price and whale transaction counts underscores a cautious stance among institutional investors. Many appear to be reducing their exposure, possibly awaiting further clarity on the network’s transition plans and upcoming updates. If whale activity does not recover soon, ETH may struggle to regain its footing, as reduced liquidity could amplify price swings in either direction.

Ethereum Price Forecast: Double Top Formation hint $3,100 breakdown

Looking ahead, Ethereum price forecast charts hint at pivotal trading periods ahead. If buying interest returns at key support levels, ETH could stabilize and potentially reclaim lost ground. However, if whale demand remains muted, Ethereum risks deeper declines, with traders likely watching for a test of the $3,000 mark in the coming weeks.

In terms of fundamental indicators. Market participants will closely monitor upcoming Ethereum Foundation announcements and Buterin’s commentary for further guidance on the network’s trajectory.

From a technical standpoint, ETH price action has formed a classic double-top pattern hinting at a potential breakdown below the critical $3,100 support.

The double top, marked by two failed attempts to breach recent highs, often signals exhaustion among buyers. With ETH now trading around $3,153, a decisive break beneath $3,100 could confirm the bearish reversal pattern, exposing downside targets at $3,020.

Further reinforcing the bearish outlook is the Elder’s Force Index (EWO), which has turned negative at -4.25. This suggests declining momentum as selling pressure intensifies. Additionally, ETH’s failure to reclaim the middle Donchian Channel boundary at $3,272 highlights the dominance of bears, keeping the broader downtrend intact.

On the bullish side, Ethereum still hovers within a consolidation zone, and a strong bounce from $3,100 could invalidate the breakdown scenario. If buyers regain control and push ETH above the $3,272 resistance, it could trigger a short-term recovery toward the $3,525 upper Donchian boundary. However, unless sentiment shifts decisively, ETH remains vulnerable to further downside.