Ethereum Price Overshadows Whale Buying to Break $3000 Support, What’s Next?

Ethereum price displayed high momentum selling in August’s first week, attributed to geopolitical tensions in the Middle East. The negative outflow trend in spot ETH ETF bolstered the bearish narrative and plunged the altcoin below $3000 on Friday. Will the current trend continue next week, or are buyers ready to retake control?

Whales Accumulation Emereged Amid Marke Correction

Recent on-chain data highlights significant whale activity in the Ethereum market, signaling a potential bullish reversal. According to the on-chain data tracker, Lookonchain, a “smart money” investor with a high win rate, acquired 2,424 ETH ($7.22M) earlier today. This adds to an already substantial accumulation, with the same investor having purchased 19,436 ETH ($68.25M) at an average price of $3,511 since May 29.

This surge in whale buying activity typically indicates a strong belief in the asset’s upside potential, but the ETH price continues to extend its downfall as it recently breached below $3000.

The smart money with a 100% win rate bought 2,424 $ETH($7.22M) 1 hour ago!

He has bought 19,436 $ETH($68.25M) at $3,511 since May 29!https://t.co/s9HqMNDtIf pic.twitter.com/iSeLsKaQCS

— Lookonchain (@lookonchain) August 3, 2024

Ethereum Price Set to Test Major Support With Weekend

Ethereum price forecast shows a 3% intraday drop to hit $2,895, reducing its market capitalization to $345.8 billion. The daily chart reveals that altcoin is just a 3% dip away from retesting the multi-month support level of a flag pattern on the daily chart. 

The pattern appears as a rectangular shape resembling a flag on a pole. The initial price spike forms the pole, and two parallel lines delineate the flag, representing the consolidation range.

Therefore, a potential rebound from this support could spark a 30% rally to challenge the flag pattern resistance. A successful breach above this resistance will signal the end-of-correction trend and may drive a rally to $5000.

The Relative Strength Index (RSI), nearing the oversold territory, might encourage buyers to initiate a rebound.

Ethereum August Performance Reveals High Volatility

According to Coinglass data, Analyzing Ethereum price performance in August over the years reveals significant fluctuations. The returns for this month have been notably variable, with the highest recorded at +92.86% in 2017 and the lowest recorded at -34.79% in 2018. 

Overall, August’s average return is +7.47%, and the median return is -7.33%, highlighting the month’s potential for high volatility in ETH’s market behavior.

On a contrary note, a breakdown below the flag pattern will intensify the selling momentum and may plunge the Ethereum price back to $2400.