Ethereum whales have been busy available in the market, as on-chain data shows that these investors have been heavily accumulating the second-largest crypto token by market cap. This comes amid a price decline in ETH’s price, with history suggesting that the crypto token might suffer more price declines within the short term.
Whales Accumulate More ETH
Data from the market intelligence platform IntoTheBlock shows that Ethereum Whales bought 297,670 ETH ($1 billion) on July 24. The day before today, these whales also bought almost 400,000 ETH. Further data shows a rise of over 28% within the inflows into these whales’ addresses within the last seven days.
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Source: IntoTheBlock
The decline in outflows from these addresses further highlights these investors’ bullish sentiment towards Ethereum despite its underperformance. Outflows from these accounts have declined by over 14% within the last seven days and down by over 16% within the last 30 days.
Source: IntoTheBlock
The large holders’ netflow metric on IntoTheBlock also highlights this wave of accumulation amongst Ethereum whales, as net flows have increased by over 313%. Which means these investors are heavily accumulating slightly than opting to sell their ETH holdings.
Source: IntoTheBlock
On-chain analytics platform Santiment noted that this significant increase in ETH’s whale activity is on account of the Spot Ethereum ETFs, which began trading on July 23. The platform made this remark while revealing that since July 17, the quantity of ETH transfers has exceeded over $100,000 in value, which is over 64% higher than the variety of BTC transfers and over 126% higher than the USDT transfers on the Ethereum network.
Source: Santiment
The Spot Ethereum ETFs had undoubtedly presented a bullish outlook for Ethereum even before they launched, as crypto analysts like RLinda predicted that ETH could rise to $4,000 because of these funds. As such, it is not any surprise that Ethereum whales proceed to build up the crypto token in anticipation of upper prices from ETH.
The Spot Ethereum ETFs Launch Might Be A Headwind At First
The Spot Ethereum ETFs were projected to be the catalyst that might spark a massive rally in ETH’s price, and that’s prone to occur in some unspecified time in the future. Nevertheless, history suggests these funds may act as a headwind for Ethereum at first, just like the fate that Bitcoin suffered immediately after the Spot Bitcoin ETFs launched earlier this yr.
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Bitcoin experienced significant price declines, largely because of the outflows from Grayscale’s Bitcoin Trust (GBTC). An identical situation is already playing out for ETH with Grayscale’s Ethereum Trust (ETHE). Interestingly, Grayscale’s ETHE experienced a net outflow of $484.1 million on day 1 of trading, much larger than the web outflows GBTC experienced on day 1, and GBTC is larger.
Considering this, Ethereum could face significant selling pressure from Grayscale’s ETHE. Data from Farside Investors shows that the Spot Ethereum ETF experienced a net outflow of $326.9 million on July 24 (day 2), likely just the beginning of the huge outflows that would eventually pour out from the fund.
ETH price struggles against bears | Source: ETHUSDT on Tradingview.com
Featured image created with Dall.E, chart from Tradingview.com