ETH tests the $4,270 support after facing rejection at a descending trendline resistance.
Ethereum (ETH) declines 4% on Thursday following a 1.22 million ETH distribution from medium-scale holders over the past four days.
After rising toward $4,700 on Tuesday, ETH saw a rejection, dropping nearly 8% over the past three days as prices pulled back toward the $4,300 level.
The decline saw medium-scale holders (wallets holding 1K-10K ETH) initiating a massive distribution, depleting their collective balance by 1.22 million ETH since Monday, according to data from CryptoQuant.
Over the same period, whale wallets holding between 10K-100K ETH grew their collective stash by 200K ETH.
The move suggests that the recent price drop was spearheaded by profit-taking activity from medium-scale holders.
This is evidenced by the gradual rise in profit-realization over the past four days. Investors have booked nearly $2.5 billion in profits since Monday, per Santiment data. Selling activity was evident across all coin ages, but mainly from short-term holders.
Historically, pullbacks triggered by medium or small-scale holders often end up as brief corrections if whale wallets continue to accumulate.
Meanwhile, Grayscale accelerated the staking of coins with its spot ETH exchange-traded funds (ETFs) since enabling the feature on Monday, creating further scarcity for ETH. The firm staked 857,600 ETH worth $3.83 billion on Wednesday, according to data compiled by smart money tracker Lookonchain.
Ethereum saw $181.4 million in futures liquidations in the past 24 hours, led by $152.5 million in long liquidations, per Coinglass data.
After facing a rejection at a descending trendline resistance and falling below the 50-day Simple Moving Average (SMA), ETH is looking to find support around the $4,270 level, which bulls defended between August 26 and September 10.
A further decline could see the top altcoin fall to the $4,100-$4,000 support range, strengthened by the 100-day SMA.
The Relative Strength Index (RSI) and Stochastic Oscillator (Stoch) are declining and testing their neutral levels, indicating a weakening bullish momentum.
