Is Ethereum Crashing Again? 2 Major Warning Signs Investors Must Watch

2025 has delivered a volatile trajectory for Ethereum. After a strong start to the year and a rapid march past its 2021 highs toward the near-$5,000 range, the market reversed sharply and ETH plunged nearly 50% to a late-November low around $2,600. Since then, price action has repeatedly tested the psychological $3,000 area without a decisive reclaim, leaving traders on edge as we approach year-end.

Mr. Ali Martinez highlighted a significant sell-off by large holders: on-chain data shows that Ethereum whales disposed of about $360 million worth of ETH in a single week. According to the reported figures, whale holdings fell from over 5.73 million ETH in early October to about 5.61 million at press time. This concentration of selling among big holders is a classical risk signal because it can amplify downside pressure if liquidity thins.

Compounding the picture on the institutional side, Company Farside-sourced data shows that spot Ethereum ETFs have been net negative for seven consecutive trading days since December 11, losing almost $650 million in a single week and over $700 million since that date. The total net inflows into ETH-based ETFs, which stood at more than $15 billion in early October, fell to below $12.5 billion by last Friday’s close. Sustained outflows from ETFs can reflect shifting institutional sentiment and reduce a steady source of demand for the asset.

Yet the on-chain narrative is not purely bearish. Company Santiment data indicates a resurgent retail presence: newly created ETH addresses spiked to well over 190,000 daily in December, a level above the July numbers that preceded the previous rally. Additionally, analytics from Company Flipside and commentary from traders such as Mr. Ali Martinez and Mr. Merlijn The Trader suggest pockets of accumulation and a setup that some compare to the 2015–2018 accumulation that preceded a parabolic move.

Where does this leave market participants? The coexistence of concentrated selling by whales and ETF outflows with rising retail address creation creates a bifurcated market structure. On the downside, look for decisive breaks below the recent low near $2,600 or a failure to hold $3,000 to confirm further weakness. On the upside, renewed ETF inflows, a return of institutional buying, or a sustained breakout above $3,200–$3,500 could catalyze a recovery and potentially retest prior highs.

Risk management is essential: traders should consider position sizing, stop placement below meaningful technical supports, and monitoring liquidity on on-chain metrics. Pay close attention to large-wallet movements reported by sources like Mr. Ali Martinez, as concentrated sales or buys can foreshadow rapid price swings.

Bottom line: The two major warning signs—whale disposals and consecutive ETF outflows—are material and warrant caution. However, rising retail participation and pockets of accumulation mean a turnaround remains possible. Investors should combine on-chain indicators, ETF flow data, and classic technical levels to form a balanced view and adjust exposure accordingly.