Ethereum [ETH], the second-most valuable cryptocurrency by market capitalization, has recently witnessed a modest recovery in its valuation. Currently, at the time of writing, ETH is being traded at $2366, marking a 1.76% increase over the past 24 hours.
Prior to this uptick, ETH had been on a downward trend, reaching a low of $2150 during the previous week. Within the last 40 days, the altcoin has seen a decline of 11.09%.
Despite the daily gains, ETH still remains significantly below its recent peak of $2820, standing at 51% lower than its all-time high of $4878.
Although the cryptocurrency has displayed positive movements in the short term, concerns loom over the market due to notable selling activities initiated by large holders. Notably, Whale Alert has reported significant inflows of ETH into exchanges, raising alarm bells among investors.
Notable Movement in Ethereum Whales
Through a series of transactions, Whale Alert has uncovered substantial ETH transfers to multiple cryptocurrency exchanges. These transactions account for a total of $538 million being sent to platforms like Kraken, Binance, Arbitrum, and Coinbase.
Breaking down the figures, Binance received $188.6 million in ETH, Kraken received $127.2 million, while Coinbase and Arbitrum recorded $34 million and $188.6 million, respectively.
Simultaneously, Metalpha has also been actively depositing large sums of ETH over the past few days. According to reports from Lookonchain, the Hong Kong-based firm has transferred $51.16 million worth of ETH in recent hours.
Over the span of five days, Metalpha has deposited a total of $128.7 million worth of Ethereum to Binance.
These sizable transactions have captured the attention of the ETH community, as the influx of ETH into exchanges is typically interpreted as an indication of potential selling activities to come.
If these significant holders choose to sell, it could exert selling pressure on the market, leading to a further decline in prices due to an increased supply on exchanges.
Interpreting the Ethereum Charts
While the uptick in daily gains may inspire optimism, recent whale transactions have left the market at a crossroads. The surge in whale activities suggests a wavering confidence in the altcoin’s direction, a sentiment that has been prevalent over the last week.
Notably, the distribution of Ethereum ownership has seen a significant shift, with retail traders now dominating the market share.
According to IntoTheBlock data, retail traders currently control 47.93% of the ETH market, while whales possess 43.07%. This shift sets the stage for a potential downturn if whales decide to trim their holdings, as retail traders tend to make emotional selling decisions.
Moreover, a decrease in whale holdings signals a lack of conviction among major holders regarding the future movement of the altcoin.
Furthermore, the exchange supply ratio has surged recently, indicating a rise in available supply on trading platforms.
As the supply ratio climbs due to increased assets being moved onto exchanges, it implies that holders are gearing up to sell in anticipation of a price decline.
Therefore, the recent whale transactions hint at significant holders preparing to offload their positions, reflecting a lack of confidence in the prospective price trajectory of ETH.
If these whales proceed with their sell-offs, Ethereum could face substantial selling pressure, potentially driving prices down to levels not seen in eight months, around $2114.