After a short-lived rally past $3,700 in early January, Ethereum struggled to sustain its gains and is now 12% below its recently established local top. The leading altcoins market sentiment remains muted.

As such, a new analysis suggests that the next significant price shift will largely be influenced by whales.

No Whale Frenzy

Ethereums price has stabilized above $3,000, but CryptoQuant analyst IT Tech warned that a drop to $2,800-$2,500 remains a possibility if whale activity surges amid price weakness.

Currently, Ethereums large transaction volume (LTV) remains low compared to previous bull cycles, indicating a market driven more by retail investors than large institutional players.

Unlike in 2017 and 2021, there is no sign of excessive speculative activity from whales. Such a trend usually indicates a more organic rally driven by retail players instead of speculative mania.

While occasional spikes in LTV have been observed, they are not yet at levels that typically precede major price movements. For Ethereum to continue its upward momentum toward $3,500 and beyond, analysts suggest a sustained increase in LTV is necessary as confirmation of strong institutional interest.

However, if large holders begin distributing ETH while prices weaken, it could trigger a significant correction. Investors should closely monitor LTV trends, as sudden shifts in whale behavior could be an early warning of a price decline to the $2,800-$2,500 range.

Rocky January for Ethereum

The Ethereum ecosystem as a whole has faced significant criticism over co-founder Vitalik Buterins ETH sales, centralization fears, and regulatory uncertainty. However, market experts argue that negative sentiment often precedes a rally, with a few projecting the asset to surge from $4,000 to $20,000.

Meanwhile, Vivek Raman, former UBS trader and founder of Etherealize, believes that crypto assets remain undervalued. He cited five key reasons for bullishness.

First, the Trump familys DeFi project, World Liberty Finance, is heavily invested in Ethereum. Second, he pointed to the rising institutional demand with asset managers and hedge funds embracing tokenization, a movement reliant on Ethereums infrastructure.

Third, investment banks are integrating crypto functionality, favoring Ethereum for its security and programmability. Fourth, the repeal of SAB 121 removes regulatory barriers and, in turn, enables banks to hold ETH and other tokenized assets.

Finally, a staked Ether ETF is expected, backed by a more innovation-friendly SEC leadership.