Ether's Plunge: Market Makers Unload Over $300M, Sending Prices Tumbling

A select group of market makers have significantly impacted Ether’s recent price drop, intensifying market concerns.

The price of Ether (ETH) has dramatically fallen from over $3,000 to around $2,200 due to substantial selling by top market makers. This decline has been exacerbated by the actions of key players in the crypto trading space.

Since August 3, five prominent market makers have sold approximately 130,000 ETH, valued at $290 million at today’s prices. Leading this sell-off is Wintermute, offloading over 47,000 ETH. Jump Trading follows with sales exceeding 36,000 ETH, while Flow Traders, GSR Markets, and Amber Group also contributed to the sell-off with smaller amounts.

0xScope, a blockchain analytics platform, noted that Jump Trading initiated the selling spree, with Wintermute eventually surpassing them in volume. The report highlighted the low liquidity during these sales, exacerbating the market impact.

"Jump Trading started dumping ETH this past weekend, ahead of other major market makers, despite low liquidity," 0xScope observed in an August 5 post on X (formerly Twitter).

As a result, Ether is struggling to maintain the critical $2,200 support level. Further selling by market makers and significant holders could push prices down further, leading to increased panic selling among investors.

The recent price drop of Ether, losing over 22.3% within a day to trade at $2,233, raises concerns among traders. Ether briefly dipped to $2,195 before recovering slightly above $2,200.

Despite the current bearish sentiment, some traders remain optimistic. MarketWizard, a pseudonymous crypto trader, noted that Ether might double from its current low if it follows historical patterns. "Despite how scary things are [right now], ETH is at the sweet spot. Retesting the 2-year base that caused a x2 earlier this year," he wrote in an August 5 X post.

Interestingly, the price decline comes despite the launch of the first spot Ether exchange-traded funds (ETFs) in the United States on July 23. However, Ether ETF inflows have been lackluster, with over $511 million in cumulative net outflows since launch, according to Farside Investors data. Grayscale’s Ether ETF (ETHE) has seen the majority of these outflows, amounting to over $2.1 billion, while other ETF issuers have logged net positive inflows.

Eric Balchunas, senior ETF analyst at Bloomberg, suggested that while Ether ETFs represent a significant regulatory milestone, they may not attract as much interest as Bitcoin ETFs. "Bitcoin is like enough crypto hot sauce. You’re like, ‘You know, I’m good.’ These things move together anyway. Ethereum is harder to explain, but I’m just seeing it being a sidekick [to Bitcoin]," he commented.

As the market continues to react to these developments, investors remain watchful, weighing the impacts of large-scale selling by market makers and the broader implications for Ether's price trajectory.

photo source / Blockonome