Ethereum gave up its gains in the Asian market on Tuesday (May 16), and the outlook is not optimistic at $1,805. After Ethereum suspended trading confirmation twice last week, well-known trader Cryptonary said that whales started a selling spree, and the price of the currency is bearish and looks towards $1,400, which means that if it cannot stand back to $1,850 and turn resistance into support, Ethereum will usher in a nearly 25% plunge.

Ethereum price declines stopped earlier this week as the cryptocurrency market has retreated from greed and returned to neutrality. As Bitcoin dominance remains high, the recovery of Ethereum is expected to be slower. Cryptonary pointed out that the smartest people know what they are doing because they are among the largest investors.

He explained: “This group is the whales, especially those who hold more than 10,000 ETH, and some of these investors began selling this week. Wallets holding 10,000 ETH to 100,000 ETH sold nearly 800,000 ETH, worth $1.45 billion, bringing their balance to 28.38 million ETH.”

On May 13, the Ethereum beacon chain encountered technical problems in the early morning, causing the network to stop producing blocks for more than an hour. This is the second such interruption in recent times. The specific cause of the failure has not yet been announced, but the network has resumed producing blocks. According to the Ethereum Foundation, when a block has not been finalized, pending transactions may be reordered or deleted from the network.

Earlier news in the cryptocurrency circle stated that on May 12, the Ethereum beacon chain experienced a brief failure in the early morning, and transactions could not be fully confirmed for about half an hour. Although the block speed slowed down, transactions continued to be processed as usual and have now returned to normal.

Cryptonary said Ethereum has faced some finality issues over the past two days, which essentially affected on-chain transactions and investor participation. Earlier this week, finality had to be suspended for about half an hour, which affected the rotation of altcoins while proving that the stability of the network is a key feature.

He added: “The state of the crypto market further proves that Ethereum could fall to $1,400. Unless $1,850 happens to become a support floor, a fall is likely, in which case an upside move could be the way out for Ethereum prices.”

However, not all aspects of cryptocurrency are bearish. At the same time as whales are selling, large wallet holders holding between 100,000 ETH and 1 million ETH are buying the supply dumped by retail investors. During the same period, these investors acquired nearly 400,000 ETH worth more than $700 million, bringing their holdings to 20.72 million ETH.

The fact that over 20 million ETH have been staked to date and another 3.5 million ETH destroyed from the supply has added to the optimism for altcoins. This is positive as it sparks discussions of deflation and makes Ethereum one of the more popular cryptocurrencies.

If further bullish clues are observed in the coming weeks, Ethereum prices could start to rebound, otherwise a drop to $1,400 is inevitable. The latter would represent a 23.43% plunge, taking Ether back to mid-January prices, a four-month low.

Therefore, any trader looking to invest in Ether should closely monitor Ethereum price fluctuations, as well as the broader macro markets.