Ethereum Dips Below $2.9K as Whale Selling Meets Anticipation for Fusaka Upgrade

Ethereum price has broken below the $2,900 support with rising whale sell pressure, but the upcoming Fusaka upgrade could boost sentiment. The second-largest cryptocurrency was trading at $2,803 at press time, down about 0.9% in the past day and roughly 5% over the week. This 30-day slide of nearly 28% places ETH approximately 43% below its all-time high of $4,946 set in August. While on-chain data points to continued selling pressure from large holders, a significant technical upgrade scheduled for the network introduces a complex dynamic of short-term bearish signals against a backdrop of long-term fundamental improvement.

A Breakdown of Key Support: Analyzing the $2,900 Level

The breach of the $2,900 price level represents a critical technical event for Ethereum. According to a Dec. 2 analysis by CryptoQuant contributor CryptoOnchain, this level acted as a strong volume node—a price zone with significant historical trading activity—serving as a floor for several months. Its failure suggests a shift in market structure and investor sentiment.

This breakdown is not occurring in a vacuum. The broader cryptocurrency market often takes cues from Bitcoin, and current data shows similar pressures there. The Bitcoin Exchange Whale Ratio has sharply increased, indicating that large holders account for the majority of inflows into exchanges. Historically, when whales dominate exchange activity, it often signals preparation for downside moves, either through direct selling or increased hedging. Since Bitcoin typically sets the pace for the altcoin market, this concentrated whale activity creates indirect but tangible selling pressure on assets like Ethereum.

Derivatives Data Reveals Rapid Position Unwinding

A closer look at derivatives markets provides further evidence of the current bearish tilt. Market activity is picking up even as the price slips. Trading volume for Ethereum has climbed 46% to $30 billion in the past 24 hours, showing that traders are becoming more active. CoinGlass data shows Ethereum (ETH) derivatives volume is up 19% to $70 billion.

However, a key metric tells a more nuanced story: open interest has dropped by 4%. In derivatives trading, open interest represents the total number of outstanding contracts that have not been settled. When trading volume climbs but open interest sinks, it typically means traders are rapidly closing existing positions rather than opening fresh long or short bets. This pattern of unwinding suggests a market that is exiting risk rather than confidently positioning for a next move, reinforcing the bearish implications of the spot price breaking below key support.

On-Chain Metrics and Whale Activity Confirm Sell Pressure

On-chain readings solidly support the bearish technical move observed on price charts. The analysis of exchange flows and holder behavior adds a layer of confirmation to the price action. The dominance of whale-sized inflows to exchanges like Binance is a classic indicator of distribution—the process of large holders transferring assets to trading venues with the intent to sell.

This activity creates a supply overhang in the market. As these large sell orders are absorbed, they can continually push the price lower unless met with equally strong buying demand. The current data does not show sufficient countervailing buying pressure from other cohorts to offset this whale selling. Furthermore, Ethereum’s Renko chart—a type of chart that filters out minor price movements—is now clearly leaning bearish, with analysis suggesting a likely next major support area around $2,250.

The Fusaka Upgrade: A Counterbalance of Fundamental Hope

Scheduled for Dec. 3, the Fusaka upgrade introduces a critical counter-narrative to the short-term bearish price action. This upgrade marks an important step in Ethereum’s ongoing scaling roadmap, following previous milestones like The Merge and Dencun. Its primary objectives are to reduce data load, lower the cost of rollup transactions, and make block space more efficient.

The upgrade incorporates several key improvements:

• Peer Data Availability Sampling (PeerDAS): This allows nodes to verify blob data without downloading the full payload, significantly cutting resource requirements and supporting higher throughput for Layer 2 rollups.
• Expanded Blob Capacity: Increases the amount of data blobs per block.
• Revised Fee Mechanics: Aims to make transaction costs more predictable.
• Leaner Historical Data Storage: Improves node efficiency.
• Smoother Proposer Scheduling: Enhances network reliability.

These technical enhancements are designed to make the Ethereum base layer faster and more cost-effective for end-users. By lowering fees and increasing throughput for rollups, the upgrade could stimulate greater on-chain activity. In Ethereum’s fee-burn economic model, increased activity leads to more ETH being permanently removed from circulation, which can improve its economic profile over the long term.

Technical Analysis Points to Continued Downtrend

From a chart perspective, Ethereum’s price action remains firmly within a downtrend. The asset is trading below all major moving averages—a classic sign of bearish momentum with both short- and long-term averages indicating sustained selling pressure.

Key technical indicators paint a clear picture:

• Relative Strength Index (RSI): Sitting around 33, it shows the asset is in oversold territory but has not yet signaled a bullish reversal.
• Moving Average Convergence Divergence (MACD): Remains in negative territory, though attempting to flatten.
• Bollinger Bands: Have widened significantly following the sharp price drop, indicating elevated volatility.
• Support Levels: Immediate support is identified near $2,700, with deeper support projected around $2,250.

For any sustained bullish momentum to return, analysts note that Ethereum would need to clearly reclaim and hold above the $3,000 zone. Until that occurs, the path of least resistance remains downward.

Strategic Conclusion: Navigating Short-Term Pressure and Long-Term Development

The current state of Ethereum presents a dichotomy familiar to crypto markets: short-term price pressure driven by trader behavior clashes with long-term fundamental progress driven by protocol development. The breakdown below $2,900, accelerated by whale selling and rapid position unwinding in derivatives markets, establishes a clear bearish bias in the immediate term.

However, the imminent Fusaka upgrade serves as a pivotal reminder that cryptocurrency valuations operate on multiple timelines. While upgrades of this scale may not instantly reverse well-established bearish technical setups, they lay essential groundwork for future network utility and economic strength. The reduction in rollup costs and improved efficiency could act as catalysts for renewed developer and user adoption in subsequent quarters.

For professional observers and participants, the coming days will be instructive. Monitoring whether selling pressure abates post-upgrade will be crucial, as will observing any shifts in on-chain metrics like network activity and fee burn rates. The market is now tasked with weighing tangible current selling against anticipated future utility—a complex calculus that will determine Ethereum's price trajectory as it navigates this confluence of technical breakdown and foundational upgrade.