Ethereum drops below the 3100 mark. What does the reduction of $64 million in short positions by a whale suggest?

Ethereum price once again falls below $3100, and market sentiment is clearly becoming quite tense. But what is more worth paying attention to is that on-chain data has just sent a key signal: that whale has started reducing their short positions of $64 million and has taken profits off the table. What does this operation imply? Let’s analyze it one by one.

On-Chain Whale Trading Logic: Reducing Positions ≠ Clearing Positions

The behavior of this whale directly reflects the current market mentality. He has not closed his position all at once but is adopting a strategy of gradual withdrawal—currently still holding a 3x leveraged short position of 8377 ETH, with an unrealized profit of about $150,000.

This tells us two important pieces of information:

First, a short-term rebound or range-bound oscillation could occur at any time, but medium-term bearish pressure has not dissipated. Since the whale still holds a position, it indicates he still expects further downside.

Second, even large capital is cautious about risk. Their reduction actions suggest that the current price level carries certain risk margins, warning small and medium investors to adjust their strategies flexibly rather than stubbornly holding one-sided positions.

Technical Scan: What Do Multiple Indicators Indicate?

Looking at the 4-hour chart, the performance of major technical indicators warrants a detailed review:

Momentum Indicator MACD Shows Weakness: DEA is at 23.60, MACD at 39.14, still in positive territory but the fast and slow lines have formed a death cross at high levels and are diverging downward, clearly indicating that upward momentum is waning.

Relative Strength Index RSI Fully Enters Weak Zone: RSI(4) is 31.53, RSI(12) is 41.21, RSI(24) is 49.34, all three below the 50 midline. Although not yet in oversold territory, a bearish trend has formed.

Stochastic KDJ Indicates Rebound Points Are Near: K value 48, D value 27, J value only 7.01, with J approaching 0, which usually signals short-term rebound demand is building, but overall still leaning bearish.

Volume Shows Noticeable Contraction: The latest candlestick volume is 8,946.94, significantly below the 5-day and 10-day averages. This suggests downward momentum is slowing, but bulls have not yet entered in large numbers to support a reversal.

What Signals Is the Market Waiting For?

Currently, the technical picture presents a typical “contradictory state”: indicators are weakening across the board, yet there are signs of a rebound. This essentially reflects a standoff between bulls and bears.

Key levels become crucial. The upper level at 3310 is out of reach, while the support zone at 2780 directly determines the medium-term direction. The market is waiting for a clear signal: either a volume breakdown below 2780 into a deeper correction, or positive news with volume-driven rebound above 3060 to establish a bottom.

In this uncertainty, blind trading often becomes the root of losses. Technical traders should adopt a wait-and-see approach, letting the market give its own answer.

Practical Strategies for ETH Traders

Bullish Strategy: If signs of stabilization appear around 3060, consider light long positions; if the price directly hits the 2780 support zone, gradually build spot positions, and exit on rebounds—avoid over-greed. Before the trend reverses, all longs should aim to exit on rebounds.

Bearish Strategy: Attempt short positions when rebounds face resistance around 3180-3250, or wait for volume breakdowns to follow through with shorts. Set reasonable stop-losses to prevent being caught in short-term oversold rebounds. Since whales have not fully closed their positions, the downtrend still has the upper hand, but avoid chasing shorts at very low levels.

Overall Judgment

The whale’s reduction of positions confirms a view: although the bearish trend has not been abandoned, caution has increased. The technical picture is weakening across the board, with the only hint of a bottom being the J value reaching its low, suggesting that rebound energy is accumulating. The current stalemate is expected to break through around 3060—either a rebound upward or a confirmation of deep correction downward. Investors should avoid taking sides prematurely and wait for the market to choose its direction before acting; this approach is more prudent.