Ethereum (ETH) to face selling pressure from ICO whale, outflows from staking

Ethereum (ETH) recovered above $2,600 after the latest crypto rally, but may be facing renewed selling pressures. An ancient ICO whale and a large-scale staker may try to liquidate their holdings. 

Ethereum (ETH) may be facing more selling pressure from whales that held for a long time. ETH prices recovered above $2,600 after the US elections rally, but may continue to face selling pressure. 

Within a short span, the ETH network saw transactions from one early ICO buyers, as well as a large-scale staker. One of the early investors acquired ETH at $0.31 and recently transferred 15K ETH to Kraken. 

The early buyer acquired a total of 150K ETH from the Genesis address during the ICO in 2016. The recent transaction originated from an intermediate address, with all 15K ETH sent out as a Kraken deposit. The whale held through much more active bull markets, but chose to sell at a time of low sentiment for ETH. 

As with other series of deposits, the move may not be tied to an immediate sale, but to expectations of further recovery for ETH. ETH ICO participants rarely sell directly, and some have turned into ecosystem investors. The last whale deposit to exchanges from an ICO wallet was noted on October 24, when the early buyer moved just 3K ETH. Previously, the same whale moved 7K ETH in the summer of 2024, leading to a deeper price crash. 

The latest whale move follows a relative low of large investor activity in the past three months. Whales moved ETH at a high rate in August, coinciding with the month’s deep correction. 

Unstaked ETH flows into DeFi

The other source of selling pressure comes from unstaked ETH. Recently, a whale took profits from a staking position, withdrawing a total of 2,236 ETH. 

After the unstsaking, the free funds flowed into Compound in the form of WETH, instead of being sent to exchanges. The new liquidity may retain the scarcity and value of ETH. 

Staked ETH growth is now more gradual, with around 6M tokens locked for staking in the past 12 months. Withdrawals of this size do not sway the market, unless they are sold through low liquidity. 

ETH is now closely watched for whale movements, as the asset has underperformed compared to BTC. While BTC achieved a new all-time high at $75,242, ETH is more than 40% under its peak and has failed to rally for the past few months.

However, whale flows to exchanges may be a sign of preparation for a bigger rally, finally achieving the long-awaited ETH breakout. 

ETH open interest shifts to short 

Open interest on ETH increased from November 6 onward, shifting to a higher percentage of short positions. The rise in open interest coincided with a spike in exchange inflows, an event usually tied to increased volatility. Exchanges hold a total of 19.26M ETH, up from a low of around 18,700 ETH in August. 

Leveraged positions added more than $1B in the past day, with a return to short interest. The new positions may cause counter-attacks, leading to an even bigger rally. The potential for a short squeeze may break the stagnant trend. Crowd sentiment remains more bullish for ETH, while smart money is slightly more bearish. 

ETH open interest has remained relatively high in the past few months, even as the spot price lagged. At this stage, traders are expecting a breakout, but also allowing for a longer time period. 

ETH has been in accumulation for the past three months. After the US elections, the asset is sparking another prediction for a ‘monster price move’ by repeating its all-time high and continuing above $5,000.