Signs of Potential Price Volatility: Ethereum Whales Offload $530M in ETH
Ethereum [ETH], the second most valuable cryptocurrency in terms of market capitalization, has shown signs of recovery in its price recently. Currently, ETH is being traded at $2366, marking a 1.76% increase in the last 24 hours.
Earlier, ETH experienced a downward trend, reaching a low of $2150 within the past week. Over the last 40 days, the altcoin has seen a decline of 11.09%.
While there have been gains on daily charts, ETH is still significantly below its recent peak of $2820, with a 51% difference from its all-time high (ATH) of $4878.
Despite the recent upswing in price, concerns about a potential sell-off loom as Ethereum whales have engaged in significant movements. Whale Alert highlighted massive ETH transfers to exchanges, raising caution in the market.
Activity Among Ethereum Whales
Notably, Whale Alert exposed a series of large ETH transfers to different exchanges totaling a substantial $538 million. Platforms like Kraken, Binance, Arbitrum, and Coinbase saw notable inflows.
The breakdown of these transactions indicates that Binance received $188.6 million, Kraken received $127.2 million, while Coinbase and Arbitrum recorded $34 million and $188.6 million, respectively.
Concurrently, Metalpha has been aggressively depositing ETH, with recent reports showing deposits worth $51.16 million within hours. In the last five days alone, Metalpha has channeled $128.7 million worth of Ethereum to Binance.
Market observers have noted these substantial movements as potential precursors to sell-offs given the trend of increased deposits onto exchanges.
If these major holders decide to offload their holdings, the ensuing selling pressure could drive prices downwards as exchange supplies surge.
Interpreting Ethereum’s Market Trends
Despite hopeful indicators on daily charts, recent whale movements have left Ethereum’s market dynamics uncertain. The large-scale transfers point to a lack of confidence in the altcoin’s trajectory, especially considering recent trends.
The shift in Ethereum’s ownership concentration towards retail traders, who now hold 47.93% of the market compared to whales’ 43.07%, sets the stage for potential further declines. Retail traders are often swayed by emotions, signaling increased volatility if whales decide to reduce their holdings.
Furthermore, a decrease in whale holdings signifies a lack of faith in Ethereum’s future direction, as highlighted by a recent surge in the exchange supply ratio indicating increasing supply on trading platforms.
As more assets are moved to exchanges in anticipation of a price dip, a higher supply ratio translates to holders gearing up to sell their assets. Consequently, the ongoing whale transactions indicate a preparatory phase for significant sell-offs, suggesting wavering confidence in Ethereum’s price trajectory.
In the event of massive whale sell-offs, ETH could witness intense selling pressure, potentially driving prices down to levels not seen in eight months, reaching as low as $2114.