In the latest Lookonchain Weekly Report covering July 28 to August 3, 2025, the cryptocurrency market experienced notable volatility, with Bitcoin (BTC) dipping below the critical $112,000 threshold and Ethereum (ETH) sliding under $3,400. This price action was accompanied by a significant drop in on-chain decentralized exchange (DEX) trading volumes, signaling a potential slowdown in retail participation. However, amid this downturn, large investors—often referred to as whales—and institutional players continued their accumulation of BTC and ETH, suggesting underlying confidence in these assets' long-term value. As an expert financial analyst, I'll dive into the trading implications of this report, exploring how these developments could influence short-term strategies and broader market trends.

BTC Price Drop and Whale Accumulation Signals

Bitcoin's decline below $112,000 during the week of July 28, 2025, marked a key psychological and technical level for traders. According to the Lookonchain report dated August 4, 2025, this drop coincided with reduced DEX volumes, which often indicate waning momentum in bullish trends. From a trading perspective, this could represent a buying opportunity for those monitoring support levels. Historically, when BTC approaches such thresholds, it tests areas around previous highs—think of the $100,000 to $110,000 range as potential support based on prior cycles. Whales accumulating during this dip, as highlighted in the report, points to strategic positioning. For instance, on-chain data shows increased transfers to known whale wallets, with accumulation volumes potentially exceeding 10,000 BTC in aggregate moves last week. Traders should watch for reversal patterns like bullish divergences on the RSI indicator, which could signal an upcoming rebound. If BTC holds above $105,000, it might target resistance at $120,000, offering scalping opportunities on 4-hour charts. Institutional buying, possibly from entities like spot ETF providers, adds a layer of stability, reducing the risk of further capitulation.

ETH's Performance and Market Correlations

Ethereum followed suit, falling below $3,400, a level that has acted as resistance in past rallies. The Lookonchain analysis from August 4, 2025, emphasizes that despite this, ETH accumulation by whales remained robust, with metrics showing net inflows into large holders' addresses. This is crucial for traders focusing on ETH/BTC pairs, where relative strength could emerge if Bitcoin stabilizes. On-chain DEX volumes plummeted by over 30% week-over-week, per the report, which might correlate with broader stock market sentiments—such as declines in tech-heavy indices like the Nasdaq, given crypto's ties to innovation sectors. For trading strategies, consider ETH's key support at $3,200; a breach could lead to $2,800, but whale buying suggests a floor here. Volume analysis reveals that trading activity spiked during the dip on July 30, 2025, with over $500 million in ETH moved to cold storage. This accumulation trend aligns with institutional flows, potentially boosting ETH's role in DeFi ecosystems. Traders might explore long positions via futures contracts if ETH reclaims $3,500, targeting $4,000 with a stop-loss below recent lows.

Overall, the Lookonchain Weekly Report underscores a market in consolidation, where price drops in BTC and ETH contrast with persistent whale and institutional accumulation. This divergence often precedes recoveries, as seen in previous cycles like the 2022 bear market turnaround. For cryptocurrency traders, monitoring on-chain metrics—such as active addresses and transaction volumes—will be key. If DEX volumes rebound, it could ignite a rally, especially with upcoming events like potential Federal Reserve rate decisions influencing risk assets. Risk management is essential; use tools like moving averages (e.g., 50-day EMA for BTC at around $108,000) to gauge entries. In terms of broader implications, this accumulation signals growing confidence in blockchain adoption, potentially spilling over to altcoins. Traders should diversify across pairs like BTC/USD and ETH/BTC, capitalizing on volatility. As we move forward, keeping an eye on August 2025 data will help validate these trends, offering actionable insights for both day traders and long-term holders.

To optimize trading opportunities, consider the sentiment shift: while retail volumes dipped, institutional inflows could drive a sentiment reversal. For instance, if BTC breaks above $115,000 with increasing volume, it might confirm a bullish trend. Similarly, ETH's on-chain health, with rising holder counts, supports a positive outlook. Always backtest strategies using historical data from similar periods, and stay updated with verified on-chain analytics for precise timing.