Ethereum's price slid nearly 4% on Wednesday, approaching the $2,400 mark, following the failure of the CLARITY Act to advance in the U.S. Senate. The legislative setback triggered broad selling across the cryptocurrency market, compounding pressure from expectations that the Federal Reserve will raise interest rates at its next meeting.
Despite the short-term bearish sentiment, on-chain data reveals a contrasting trend among large investors. According to CryptoQuant, Ethereum exchange reserves have declined by approximately 159,000 ETH over the past five days, as withdrawals consistently outpaced deposits. This movement suggests that holders are shifting assets to private wallets, reducing the readily available supply on exchanges—a factor that could support prices if demand holds steady.
Whale activity further underscores this divergence. Wallets holding between 10,000 and 100,000 ETH have added roughly 200,000 ETH to their balances over the last week, indicating accumulation during the dip. In contrast, smaller holders—those with 100 to 10,000 ETH—distributed about 192,000 ETH in the same period, continuing a retail distribution trend observed since the start of the year. This dynamic implies that larger players are absorbing the supply released by smaller participants.
Institutional interest, however, has cooled. U.S. spot Ethereum ETFs recorded $142.30 million in net outflows on Tuesday, mirroring the broader market pullback. The outflows suggest that institutional investors are reducing exposure amid regulatory uncertainty and tighter monetary conditions. Market pricing, as per the CME FedWatch tool, assigns a 92.3% probability to a 25-basis-point rate hike at Wednesday's meeting.
The CLARITY Act's failure to secure the 60 Senate votes needed for cloture triggered immediate selling, pushing Ethereum roughly 5% lower. Coinglass data shows about $211 million in liquidations over 24 hours, with long positions bearing the brunt—$184 million of that total.
From a technical perspective, Ethereum has slipped below its initial support at $2,431 and the 20-day exponential moving average near $2,435. However, the cryptocurrency remains above its 50-day, 100-day, and 200-day EMAs, which cluster between approximately $2,153 and $2,270. Holding this zone preserves the broader constructive trend despite the short-term decline.
The 14-day Relative Strength Index sits near 50, indicating neutral momentum, while the Stochastic oscillator has entered oversold territory. If ETH fails to reclaim $2,431, the next major support lies at the 50-day EMA of $2,270 and the 200-day EMA of $2,266. Further downside levels include $2,172, $2,153, $1,961, and $1,809. On the upside, resistance is seen at $2,544, followed by $2,626 and $2,786.
For context, Ethereum's recent price action is part of a broader market correction. As noted in our earlier coverage of the Fed-driven slide, macroeconomic factors continue to weigh on risk assets. Meanwhile, the ongoing accumulation by whales and declining exchange reserves may set the stage for a rebound if regulatory and monetary headwinds ease. Investors are also watching whether Ethereum can break above the $2,550 level, a key hurdle for a potential move toward $3,000, as discussed in our analysis of futures activity.
This article is for informational purposes only and does not constitute financial advice.
