Ethereum’s 13% Plunge: Whales Buy Low, But Smart Money Stares in Skepticism!

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Ah, dear reader, Ethereum’s price has taken a rather dramatic dip, slipping nearly 6% in 24 hours and a rather alarming 13% over two days. One might say it’s been a rather choppy January, with the market behaving like a fickle lover-capricious and unpredictable.

Yet, beneath the surface, the large holders, those enigmatic whales, have been stepping in with the enthusiasm of a man at a buffet. Approximately $360 million worth of ETH has been accumulated, but the smart money, that elusive group of informed traders, remains unimpressed, as if they’ve seen this act before and know the punchline is yet to come.

Triangle Pattern And Bullish Divergence Face Off Against Heavy Supply Cluster

Ethereum is currently trading within a symmetrical triangle on the daily chart, a geometric marvel that suggests both buyers and sellers are engaged in a delicate dance. The sellers, however, have been rather uncooperative, rejecting the price near the upper trendline earlier this month. Now, the price is testing the lower boundary, and one wonders if the buyers can save the day-or at least the chart.

Momentum, that fickle friend, offers a crucial clue. Between November 4 and January 20, Ethereum printed a lower low, while the RSI formed a higher low. A bullish divergence, if you will, suggesting that the selling pressure is weakening, even as the price tests support. It’s a bit like a wobbly chair-still standing, but one can’t help but wonder how long it’ll hold.

This kind of signal mattered before. In early January, a bearish RSI divergence preceded the recent drop. Now, the opposite setup is forming, hinting at a potential reversal rather than continuation. One might say the market is playing a game of chess, but with more confusion and fewer moves.

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The possible bounce, however, faces a clear obstacle. Cost basis data reveals a dense supply cluster between roughly $3,146 and $3,164. About 3.44 million ETH was accumulated in this zone. Many holders are near breakeven, which, as we all know, is a dangerous place to be. It’s the financial equivalent of standing on a tightrope, hoping the wind doesn’t blow.

Many holders are near breakeven. That often turns the area into strong resistance. Any rebound must clear this cluster to prove strength and turn into a reversal, as the RSI hints.

Whales Buy the Dip, but Smart Money Waits

Whales are acting with conviction, as if they’ve seen the future in a crystal ball. As Ethereum fell from around 13%, whale holdings rose, representing a $360 million accumulation. This is not new behavior; it’s the same old story, but with a different cast of characters.

Similar whale buying appeared around January 14, shortly before a sharp bounce. Plus, the Ethereum whales started picking up supply again over the past few hours. This steady accumulation signals confidence that the downside is limited near current levels. Whales are willing to absorb supply during weakness.

Smart money tells a different story.

The smart money index, which tracks informed positioning, remains below its signal line. Smart money typically moves early and aggressively before sustained rallies. In December, when this indicator surged above the signal line, Ethereum rallied about 26% in ten days. A similar move at the end of December preceded a 16% advance into mid-January.

That kind of confirmation is missing now. Smart money appears to be waiting for proof that resistance is cleared. The heavy cost basis cluster above the ETH price likely explains the hesitation. Until supply is absorbed, patience makes sense.

Ethereum Price Levels Reveal The Key Zone

Everything now funnels into a narrow range of levels.

The first level to reclaim is $3,050. Ethereum lost this multi-touchpoint support during the latest selloff. A daily close back above it would signal initial stabilization. But let’s not get ahead of ourselves-after all, the market is a fickle friend.

Above that, all eyes turn to the $3,160 area. This level has multiple touchpoints and aligns with the cost basis supply cluster. A clean daily close above it would represent roughly a 6% move from current prices. More importantly, it would break heavy resistance and could invite smart money back in. Post that, the reversal setup can take form.

If that happens, momentum could accelerate quickly. A confirmed breakout opens the path toward $3,390, where a broader bullish reversal would take shape.

On the downside, losing the lower triangle support near $2,910 weakens the rebound thesis. A sustained break there exposes $2,610 as the next major support.

Ethereum’s sellers may have won the recent battle, but the war is still on. Whales are already positioning for a bounce. Smart money is waiting for proof. If Ethereum can clear the $3,160 supply wall, hesitation may turn into momentum fast.

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2026-01-21 13:36