Ethereum returned to the $3,160 level after the long-awaited FOMC meeting, where the Federal Reserve cut interest rates by 25 basis points. While rate cuts typically support risky assets, Jerome Powell’s comments added a novel layer of uncertainty to the market.
Openly acknowledging the risk of weaker growth coupled with persistent inflation, Powell raised the possibility of stagflation – a scenario that has posed challenges for both stocks and cryptocurrencies in the past. As a result, market sentiment remains volatile and investors are struggling to interpret what this macro shift could mean for Ethereum’s next move.
Despite the uncertainty surrounding the decision, one major whale continues to act with conviction. According to Lookonchain, Bitcoin OG, which famously shorted the market during the October 10 crash, is once again doubling down on its bullish position on Ethereum.
Rather than take profits or reduce exposure after the recent rally, it continued to accumulate aggressively, signaling mighty confidence in ETH’s medium-term trajectory even as broader sentiment turns cautious.
The whale’s position increases, but the risk increases
According to Lookonchain, a whale position has now grown to 120,094 ETH worth approximately $392.5 million. With a liquidation price of $2,234.69, this has become one of the largest and most aggressive long positions currently tracked on-chain.
Such a massive allocation signals extreme confidence, especially coming from the same OG Bitcoin that successfully shorted the market during the October 10 crash. However, the scale of this bet also highlights how much risk is currently concentrated in one directional position.
The key issue is the liquidation price. At $2,234, it’s almost $1,000 below current levels, but in highly leveraged environments – especially during times of macroeconomic uncertainty – prices can rise sharply. Ethereum has already shown a tendency to move sharply intraday, and with funding rates rising and market leverage reaching historic highs, even a moderate correction could trigger cascading liquidations.
If ETH experiences a sudden boost in volatility due to changing macro conditions, a negative reaction to the latest FOMC decision, or a broader market downturn, the whale’s position could come under significant pressure. While huge whales often influence market sentiment, this setup shows just how slim the margin for error has become.
ETH tests resistance as momentum fades
Ethereum has returned to the $3,196 level after failing to hold above the $3,300 zone, signaling that bullish momentum is starting to fade. The daily chart shows ETH rejecting the red 200-day moving average, a key long-term trend indicator that has acted as resistance during the recent downtrend. Until ETH breaks and closes decisively above this level, the broader structure remains vulnerable.
The 50-day moving average continues to trend lower, reflecting continued selling pressure despite last week’s rebound. Meanwhile, the 100-day moving average is well above the current price, reinforcing the major resistance ETH needs to overcome to re-establish a bullish trend. Volume has also declined from the early December rebound, suggesting buyers are losing strength as price approaches major resistance levels.
Related Reading: Bitcoin Exchange Reserves Fall to All-Time Low: The Bullish Signal Most Traders Are Missing
Structurally, ETH remains in a medium-term downtrend, making lower highs and lower lows since September. While the recent push from the $2,800 region shows buyers are defending key support, the rejection at $3,350 highlights that sellers are still in control at higher levels.
If ETH does not regain its 200-day moving average soon, a retest of the $3,050-$3,100 support range becomes likely. Conversely, a mighty rebound above $3,350 could open the door to a move towards $3,500, but the market will need renewed momentum to get there.
Featured image from ChatGPT, chart from TradingView.com
