Ethereum Price Warning Reappears After 9% Drop Last Week
Ethereum Price
ETHUSD
once again signals a bearish trend similar to before the nearly 9% correction last week, and this signal re-emerged on April 22.
However, the underlying position has now changed. Whale accumulation and changes in the funding rate indicate that this time the path could differ from the unwind action on April 17, although the core divergence remains the same.
RSI Divergence Reappears as Whales Change Behavior
Ethereum Price
ETHUSD
shows a regular bearish divergence for the second time in the past five weeks. The Relative Strength Index (RSI), which is a momentum indicator, peaked at 66.54 on March 16. When the price broke to a higher level on April 22, the RSI failed to match that peak, forming a lower high on the oscillator. This number indicates weakening momentum.
The same pattern also appeared between March 16 and April 17. At that time, ETH experienced an 8.88% correction before finding support at the $2,252 level.
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Nevertheless, current whale behavior appears different. Data shows that Ethereum whales are starting to add to their supply again. The assets they hold increased from 123.75 million on April 19 to 123.91 million on April 22.
Unlike the unwind action from April 16-19, when whales were releasing reserves as the price corrected, this change in position provides a different background, although the divergence is still active. However, traders should continue to monitor whale movements, as this group tends to suddenly release their asset reserves.
Confirmation of this change depends on the funding rate and open interest, whether they will trigger further correction from the existing divergence.
Funding Rate Reverses, Different from Last Week’s Setup
In the derivatives market, traders’ position setup this time differs from mid-April. ETH open interest is around US$12.3 billion, nearly the same as when the divergence occurred on April 17. But, Ethereum’s funding rate has actually reversed direction.
On April 17, the funding rate was at -0.003%, indicating a market leaning toward short positions. That short bias created a squeeze opportunity. When the price reversed from the April 19 low (after the divergence), trapped shorts had to close their positions, supporting a rebound. Now, the funding rate is slightly positive, meaning more traders are holding long positions.
This change is quite significant. Although the long positions are not very large, combined with the bearish divergence signal, it creates a scenario opposite to last week. If a correction occurs, liquidating long positions could actually deepen the price decline, rather than trigger a short squeeze and rebound. However, the funding rate is still far from extreme levels that could directly trigger a squeeze in either direction.
With whale flows supporting gains but the market position tending to be long, Ethereum’s price chart now becomes a key factor.
Important Price Levels Determine the Next Direction
The ETH price chart shows a decision zone. To invalidate the bearish setup, ETH must close above $2,377, which is the 0.236 Fibonacci level and currently the main resistance for a rebound.
The downside scenario heavily depends on whales maintaining their current positions. If ETH fails to reclaim the $2,377 level and whale reserves decrease, $2,252 will be the first testing area, as previously mentioned. This area coincides with a cluster of ETH cost basis concentrations.
Data from Glassnode shows that 716,028 ETH are in the $2,231 to $2,250 cost basis range. Holders within this cost basis did not sell during the ETH correction on April 17-19. This could be the reason why $2,252 managed to hold as support earlier.
If $2,252 does not hold, the next major demand zone is between $2,067 and $2,085. This cluster contains 1,417,672 ETH in cost basis, nearly twice the supply at the $2,252 level.
If the price breaks below this level, ETH could move toward a lower level around $1,935.
One more important point: the divergence remains active, but whale flows have changed since April 17. Therefore, this correction may not be as deep as before. Still, if whale distribution continues, the main difference between last week’s scenario and now will disappear.
If the daily price closes above $2,455, the 0.382 Fibonacci level, there is a chance for the price to move toward $2,517. Further targets are at $2,580, $2,783, and $3,112.
However, if the price drops below $2,252, ETH’s chart has a key support at $2,082, which is also the largest demand zone above $2,000. This means the $2,252 level acts as a boundary between a light correction and a deeper decline into the cost basis zone of 1.4 million ETH.
