Ethereum has made an underwhelming start to August, with ETH price dipping below the $1,850 support level on Wednesday. Ethereum now potentially faces more August headwinds amid mystery whale inflows into exchanges and a decline in ETH 2.0 staking.
Heading into August 2023, Ethereum price action has left much to desire for bullish ETH holders. Barely three days into the month, ETH price is already down 2%, losing the critical $1,850 support.
On-chain analysis reveals critical bearish indicators that could see ETH face turbulent headwinds in August.
Mystery Whale Sends $74 Million to Coinbase
According to Whale-Alert.io —an on-chain tracker tool that reports notable large transactions, a mystery ETH whale has been making some potential bearish moves.
On August 2, an unknown whale was spotted moving 19,789 ETH worth $36.4 million into a Coinbase exchange wallet.
A deeper inquest into the unknown whale’s recent transactions via Arkham Intelligence reveals a more worrying trend. Two weeks ago, the whales had moved $37 million worth of ETH to Coinbase, split across 10 separate transactions.
Notably, Coinbase currently offers an estimated APY rate of 4.95% on Ethereum staking. Optimistic Ethereum investors suggested that the whale could be looking to take advantage of the prime passive income opportunity.
However, the initial market reaction did not reflect that bullish sentiment. Instead, barely 24 hours after the transaction was confirmed, ETH price slid from $1,870 to around $1,830.
If the optimistic investors begin to panic, ETH could face more turbulent August headwinds.
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ETH 2.0 Staking Inflows Have Dropped Significantly
In validation of the bearish outlook, on-chain data reveals that ETH 2.0 Staking inflows have dropped significantly this week. According to Cryptoquant, ETH Staking Inflow data has declined considerably compared to the figures recorded at the end of July.
As depicted below, Ethereum Staking inflow stood at 141,600 on July 28. At the close of August 2, only 27,648 ETH were deposited into ETH 2.0 staking contracts.
Staking Inflow data tracks the daily volume of ETH coins deposited into ETH 2.0 staking smart contracts. Ideally, when staking rises, it boosts investor confidence and reinforces the security architecture of the blockchain network.
When the rate of staking declines, as observed above, it signals that investors are now optimizing for short-term plays rather than holding out for future gains.
Combined with whales moving funds into exchanges, the staking inflow decline could result in more August headwinds for ETH.
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ETH Price Prediction: Will the Bears Push for $1,750?
Considering the bearish indicators identified above, ETH bears appear to be eyeing a drastic reversal toward $1,750. Having lost the critical 1,850 support level, the chart below shows that ETH could see a continued downtrend below $1,750.
However, the bears could have difficulty penetrating the psychological support level to around $1,800. At that zone, 2.94 million addresses have acquired 5.78 million ETH at the average price of $1,804.
If that support cannot hold, bears could push Ethereum’s price toward $1,750.
Still, if the whales begin to stake again, it could trigger a rebound toward $1,900. Although, 5.23 million holders that bought 10.77 million ETH at the average price of $1,864 could pose significant resistance.
Nevertheless, ETH could reclaim the $1,900 milestone if the bulls can overturn that resistance level.
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