Ethereum whales are displaying signs of pressure as sideways price movement tests their conviction - could profit-taking be on the horizon?

An Ethereum whale recently spent $295 million to purchase 115,465 ETH, currently facing a $15 million unrealized loss.

If ETH continues to trade in a range, how long before even smart money begins to cash out? Ethereum [ETH] experienced a 4.60% decline on June 20th, ending the day significantly lower than its $2,522 opening price. Notably, it dipped as low as $2,368, marking its lowest level in almost two weeks.

This was not just a minor setback. Importantly, BlackRock's ETH ETF (ETHA) saw its first daily outflow of $19.7 million, breaking a 32-day streak of consistent inflows or neutral activity.

Does this indicate a shift in Ethereum's market dynamics? One that goes beyond the usual leverage liquidation, but rather hints at diminishing patience?

ETH Holders React

About a month ago, ETH hit a local low at $2,454. Fast forward to the present, it has only risen by 0.4%, indicating that the price remains trapped in a narrow range, and Q2 is not looking to end on a strong note.

In such a fragile market, defending support levels is crucial to maintaining bullish sentiment. This is why the drop below the two-week low at $2,368 was significant.

It prompted a quick response across the market. Realized profits on Ethereum surged to a monthly high of $656 million, suggesting that investors capitalized on the breakdown by locking in gains before the situation worsened.

However, not everyone rushed to sell. According to Lookonchain, a whale who previously made over $30 million on ETH recently purchased an additional 30,000 ETH (approximately $73 million) after the price decline.

Since June 11th, this whale has spent around $295 million in USDC to buy 115,465 ETH at an average price of $2,555. Despite being down $15 million currently, they seem committed to a long-term strategy.

The big question remains: How sustainable is this confidence?

Ethereum's Resilience Tested

Recent price movements in Ethereum have highlighted strong buying interest, with smart money and institutional players consistently absorbing losses from leveraged positions.

This is precisely why BlackRock's $19.7 million outflow is noteworthy. Derivatives liquidity on ETH peaked at $41.1 billion on June 11th, indicating a market filled with bets and risk.

Whales and ETF inflows initially helped offset the initial drop, but the current situation seems more precarious. Leverage continues to rise, but confidence is waning. So what happens if another sell-off occurs and there are no buyers to step in?

A breach of the next crucial support level seems likely. In such a market environment, where confidence erodes and leverage accumulates, things can unravel rapidly.