Ethereum Whale Accumulation Continues Despite Selling Pressure: ETH Price Recovery Soon?
While spot Ethereum ETFs saw a successful launch with more than $107 million in inflows on Tuesday, ETH prices have been under selling pressure, down 1.1% at press time and close to $3,450 levels.
Ethereum ETFs and Selling Pressure
Ethereum’s spot ETFs launched successfully, bringing in over $107 million in inflows. Despite this, ETH prices have been dropping, currently down by 1.1%, hovering around $3,450. However, on-chain indicators suggest that Ethereum whale activity remains strong, hinting that the downside could be limited.
On-Chain Indicators and Whale Activity
On-chain data from IntoTheBlock shows that large holders amassed 112.9k ETH, worth a staggering $390 million, despite the ETF price decline yesterday. This accumulation far exceeds the $106 million net inflows to Ethereum ETFs. This shows strong demand for Ethereum among big market players right now.
Similarly, on-chain data analytics platform Santiment reported that the introduction of the spot Ethereum ETFs has significantly influenced whale activity over the past week. Since July 17th, the number of ETH transfers exceeding $100K in value has increased by 64% compared to BTC transfers and by 126% compared to USDT (on ETH) transfers.
Ethereum Price Action Going Ahead
Reportedly, Ethereum is following the same trajectory that Bitcoin did after the approval of the spot BTC ETFs earlier this year. The Bitcoin price surge started in February as investors managed to settle through the Grayscale outflows and BlackRock inflows. Popular crypto analyst Michael van de Poppe wrote:
“If the markets copy the price action of the Bitcoin ETF, then it’s likely we’ll have a slight sell-off due to the outflows of the Grayscale trust. One or two weeks of downward momentum before the real surge of Ethereum towards a new all-time high.”
As per the chart shared by Poppe, Ethereum might see a reversal to $3,150 levels before resuming the upward journey. It will be interesting to see how long the Ethereum ETF inflows continue, thereby instilling confidence among investors.
Ethereum Spot ETF Hype and Whale Activity
According to data from the on-chain analytics firm Santiment, Ethereum whales have been displaying considerable activity recently. The indicator of relevance here is the “Whale Transaction Count,” which tracks the total amount of transfers on any given network valued at least $100,000.
When the metric’s value is high, the blockchain observes many large transactions. Such a trend implies the whales have an active interest in trading the asset. On the other hand, a low indicator suggests the whales may not be paying much attention to the cryptocurrency as they aren’t making that many transfers.
Whale Transaction Count Analysis
Here is a chart that shows the trend in the Whale Transaction Count for the top three coins in the sector, Bitcoin (BTC), Ethereum (ETH), and Tether (USDT), since the start of the year:
As seen, the Whale Transaction Count for Ethereum has been the highest among these three assets recently. More specifically, ETH has seen 77,200 whale transactions since the 17th of this month, notably higher than BTC’s 47,000 or USDT’s 34,100.
Impact of Spot ETFs on Ethereum Whale Activity
The sharp spike in activity for Ethereum is likely due to the hype around the spot ETFs, which, after much anticipation, have finally been launched following approval by the US Securities and Exchange Commission (SEC). The Whale Transaction Count suggests whales had started repositioning themselves before this launch. It’s hard to say what type of activity these large holders were participating in based on this indicator alone.
Given that the event was considered bullish, it would make sense if the whales were buying. Data from the market intelligence platform IntoTheBlock has confirmed that large holders have recently increased their supply.
Ethereum Large Holders Netflow
IntoTheBlock defines “large holders” as investors who own at least 0.1% of the entire Ethereum supply in circulation. From the chart, it’s apparent that the net flow into the wallets of this cohort has remained positive over the past week, coinciding with the period that the whales have been active.
Yesterday alone, Ethereum large holders bought 112,900 ETH, equivalent to around $391 million at the current exchange rate. This accumulation notably surpasses the $106 million net inflows to the ETF, notes the analytics firm.
Conclusion
The continuous accumulation of Ethereum by whales despite selling pressure indicates a strong demand among large investors. With the successful launch of Ethereum ETFs and a significant increase in whale activity, the future of ETH prices seems promising. The analysis suggests a potential price recovery, following the patterns seen with Bitcoin after its ETF approval. Investors and traders will be watching closely to see if Ethereum can overcome the current selling pressure and move towards new highs.
