Ethereum Retreats from Highs as Analysts Warn of Overheating, Despite Strong Whale Accumulation
Ethereum’s march toward the $4,000 mark hit a speed bump this week, with ETH sliding over 3% to $3,696 on Monday amid concerns of an overheated market. While institutional buying remains strong, analysts are signaling that a correction may be due following the token’s recent outperformance.
The pullback comes after ETH posted two weeks of solid gains, during which it consistently outperformed Bitcoin. However, market observers are beginning to question the sustainability of the rally.
Crypto analytics platform Front Runners noted that ETH has now outperformed BTC for 14 consecutive days—a trend they call “unsustainable without a reset.” They flagged that ETH’s relative strength index (RSI) is in overheated territory and suggested sentiment may be tipping into euphoria.
Analyst Michaël van de Poppe warned that ETH’s drop toward $3,650 could foreshadow a “violent correction,” while fellow commentator Andrew Crypto echoed those concerns, stating that although ETH has shown “insane strength,” a rejection at resistance makes a short-term pullback more likely.
Not all analysts are sounding the alarm. Crypto Rand remained bullish, having previously forecast a move to $4,000 as inevitable. That optimism is bolstered by on-chain metrics, which show record levels of whale accumulation, according to CryptoQuant data cited by Crypto Rover.
Corporate buying also continues at pace. SharpLink Gaming (SBET), one of the largest ETH-holding public firms, announced it had acquired nearly 80,000 ETH in the week ending July 20—its biggest weekly purchase since launching its treasury strategy in June. The company now holds 360,807 ETH and disclosed an additional $96 million in capital set aside for future acquisitions.
Despite the recent price dip, Ethereum remains up nearly 20% over the past month, supported by rising retail and institutional conviction. But analysts caution that the path to $4,000 may not be linear.
“A chart without a correction isn’t a healthy chart,” said Andrew Crypto, noting the need for consolidation before the next leg higher.
As of publication time, ETH is trading at $3,696, down 3.44% over the past 24 hours, according to CoinDesk data.
Technical Summary:
- 24-Hour Price Drop: ETH declined 6.11% between July 21 at 15:00 UTC and July 22 at 14:00 UTC, with an intraday range of $228, falling from $3,851 to a low of $3,624.
- Volume Surge: Trading volume spiked to 353,275 units, significantly above the 24-hour average of 265,473.
- Resistance Levels: The $3,730–$3,740 area proved difficult to break, with renewed selling pressure cutting short attempted recoveries.
- Support Breaches: Key support zones at $3,690, $3,670, and $3,650 were all broken under high-volume liquidation, exceeding 20,000 units per minute at peak.
- Closing Momentum: ETH ended the session near its lows at $3,647, signaling sustained bearish pressure heading into the next trading cycle.
