Ethereum Price Drop May Be Temporary With Whales Buying $1 Billion and Profit Taking Slowing

Ethereum fell more than 5% today, trading around $4,300. This was one of the biggest one-day drops in the past few weeks. However, monthly gains remained steady at more than 13%, suggesting that the broader uptrend has not been broken.

The question now is whether today's drop is just a blip or the start of something deeper. On chain and technical signals suggest this drop may not last long, with profit taking easing and whales stepping in.

Profit-taking activity declines as whales add $1 billion in ETH

The Spent Coins Age Band metric, which tracks when long-held coins are sold, has dropped to a monthly low of around 135,000 ETH. This means that long-term holders are selling less — profit-taking has dropped sharply since early August, when the metric was above 525,000 ETH. That’s a 74% drop.

History shows that when this indicator Dip, Ethereum usually bounces back. For example:

• On July 7, the number of coins spent dropped to 64,900 ETH, and the price of Ethereum increased from around $2,530 to $3,862 — a 52% increase.
• On August 17, the same pattern led to a 20% increase, as ETH rose from $4,074 to $4,888.

Now, the latest drop back to the local low could again indicate that the selling wave is waning.

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Additionally, whales have been quietly buying as prices have fallen. Addresses holding more than 10,000 ETH have increased their holdings from 95.76 million ETH on August 27 to around 96 million ETH today.

At current prices, that means whales have added about $1 billion worth of ETH in just two days. Combined with reduced profit-taking and new accumulation from whales, Ethereum has a foundation for the next rally.

Ethereum Price Action and Liquidation Map in Synchronization at Key Levels

Beyond the on- chain signals, the charts also align with the bullish view. On the Bitget liquidation heatmap, the short position stacking started at $4,400, making this level a key pivot point.

If ETH can close the daily candle above $4,406, it could trigger the liquidation of those short positions, forcing traders to buy back in and push Ethereum price higher.

The liquidation map shows where traders have placed heavily leveraged positions (long and short) and at what price liquidation will occur.

On the downside, immediate support lies around $4,255, which aligns with the $4,242 level on the liquidation map. This is the level where the most leveraged long positions were liquidated.

Therefore, if Ethereum price holds at $4,255, a bearish reversal could occur as deleveraging risks weaken.

If ETH price breaks below that level, the next important level is $4,064. A drop below this level could flip the trend to bearish in the short term.

The congruence between the liquidation clusters and the price chart levels adds credibility to these zones. It means that traders are all watching the same numbers, making the reaction at these points even stronger.

The path is clear now: hold above $4,255 and reclaim $4,406, and the reversal becomes stronger. Failure at those levels puts Ethereum at risk of extending its decline.