Ethereum Price Forecast: Short-term holders spark $400 million in realized losses, staking flows surge

Ethereum short-term holders capitulated, realizing $400 million in losses following increased risk-off sentiment surrounding President Trump's reciprocal tariff announcement.

Despite the capitulation, ETH exchange and staking flows indicate most investors lean toward a bullish outlook.

ETH risks further downside pressure if it sustains a firm decline below $1,800.

Ethereum (ETH) bounced off the $1,800 support on Monday following increased selling pressure from short-term holders (STHs) and tensions surrounding President Donald Trump's reciprocal tariff kick-off on April 2. While the near-term outlook suggests caution, declining ETH exchange reserves and rising staking balance could help keep prices afloat.

Ethereum STHs trigger $400 million in realized losses amid increased staking flows

Ethereum short-term holders are expressing increased risk-off sentiment as market participants remain uncertain about how prices may react to April 2 "Liberation Day," during which Trump plans to impose reciprocal tariffs and increase duties on US trading partners.

The consistent spikes in the Dormant Circulation metric show that short-term holders — primarily coins that were last moved between the past six to three months — accelerated their distribution in March.

ETH dormant circulation. Source: Santiment

In the past few hours, these cohorts increased their distribution again, with several investors potentially selling at a loss, according to the Network Realized Profit/Loss metric. The metric shows that recent sellers realized nearly $400 million in losses on Monday.

Similar spikes of realized losses are visible throughout March, indicating capitulation from most STHs, which are responsible for a majority of the distribution during the month. Historically, prices tend to find a bottom after the selling pressure from STHs has been washed out of the market. However, a further breakdown is expected if long-term holders join in the distribution.

ETH realized profit/loss. Source: Santiment

Meanwhile, investors holding between 1K - 10K ETH increased their distribution in the past two weeks, scaling down their collective balance by 160K ETH. ETH's extended downtrend and underperformance could be fueling their divesting, considering this class of investors consistently increased their holdings since January until recently

On the other hand, whales holding between 10K -100K ETH expanded their balance by 290K ETH over the weekend, indicating diverging sentiment between the two classes of investors.

ETH supply distribution. Source: Santiment

This follows ETH exchange reserves remaining at low levels after investors pulled out 940K ETH during the month. Most of the funds potentially flowed from exchanges to staking protocols, considering ETH's total value staked surged by about 530K ETH in the past three weeks. This signals a preference for long-term holding despite prices remaining down.

ETH total value staked. Source: CryptoQuant

Ethereum Price Forecast: ETH risks a bearish continuation if $1,800 fails to hold

Ethereum saw $63.18 million in futures liquidations in the past 24 hours, per Coinglass data. The total amount of liquidated long and short positions is $37.33 million and $25.85 million, respectively.

ETH bounced off the $1,800 support level after declining over 10% from Friday into the weekend. The move comes after ETH broke out of a falling wedge pattern before seeing a rejection at the $2,070 resistance last week. A bullish outlook is still valid if buyers hold the support near $1,800.

ETH/USDT daily chart

A breakout above $2,070 and the key descending trendline resistance extending from December 16 will validate a bullish trend. However, the resistance could prove a major hurdle as it is also strengthened by the 50-day Simple Moving Average (SMA).

On the downside, ETH could validate a bearish continuation pattern if it sustains a firm decline below $1,800. Such a move could see ETH finding support at $1,500.

The Relative Strength Index (RSI) is below its neutral level. The Moving Average Convergence Divergence (MACD) line is testing its moving average line while its histogram bars are on the verge of flipping negative. A crossover below could accelerate the downside pressure.