Ethereum retraced and hovered around $3.1k, indicating a market stuck at a decision point. At press time, Ethereum [ETH] traded at $3,117, up 0.22% on the daily chart but down 1.37% on the weekly chart.
The continued sideways movement established a perfect buying window, especially for whales.
Ethereum whale scoops up millions!
According to Lookonchain, an Ethereum whale returned after a 23-day break. The whale continued its aggressive accumulation, adding 38,576 ETH, valued at approximately $119 million.
To make the trade, the whale borrowed 85 million USDT from Aave and then moved it to Binance. After the latest addition, its total holdings jumped to 528,000 ETH, worth $1.723 billion, bought at an average price of $3,261.
All the above purchases were conducted within 40 days. With the market trending down over the period, these holdings recorded an unrealized loss of $105.7 million.
Often, whale-initiated purchases during downturns have been accompanied by elevated bullish sentiment. Such conditions have played a critical role in supply reduction.
Source: CryptoQuant
As a result of whale accumulation, Ethereum’s Exchange Supply Ratio dipped to 0.13 and reached a monthly low.
A drop in ESR suggested fewer coins deposited into the Exchange, while withdrawals dominated exchange activity.
In fact, Exchange Depositing Addresses dropped to 4k, compared to 17k in withdrawal transactions. Such market conditions have resulted in decreased supply-side pressure, by hiking scarcity, often a prelude to higher prices.
What’s holding ETH back?
While Ethereum recorded a drop amid supply-side pressure, the spot market saw a spike in retail dominance.
Spot Average Order Size data from CryptoQuant showed a high volume of retail orders for seven consecutive days.
Usually, higher retail orders reflect increased market participation from small-scale traders, either on the demand or supply side.
Source: CryptoQuant
Historically, retail dominance warned of trouble in the market. Retailers have been highly associated with poor risk management. Retail traders have emotionally pursued the market, leading to market instability.
A market dominated by the groups has seen sharp reversals, as they have tended to cash out at every opportunity, creating a fake breakout. That explained the current situation of Ethereum’s price movement.
What’s next for ETH?
While whale accumulation significantly reduced supply-side pressure, current demand remained inadequate to propel an upside movement.
However, the demand witnessed absorbed the rising pressure and has so far successfully held the $3k support level.
At press time, although the market signaled a potential trend shift, the momentum remained relatively weakened. RVGI Space Value dropped to 0.029, after it formed a bearish crossover days ago.
Source: TradingView
Such market conditions indicate that buyers have yet to retake the market, and the risk of further downside remains. A continuation of the trend could see a drop below $3k.
Conversely, if the demand from whales and the reduced supply are finally felt, ETH could reclaim $3.3k and the middle band of the Fibonacci Bollinger Bands at $3622.
Final Thoughts
- An Ethereum whale returned after 23 days and purchased 38,576 ETH, worth $119 million.
- Ethereum’s momentum remained relatively weakened by retail dominance.
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