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Crypto: Ethereum Whales Take Their Profits, a Worrisome Sign?

Mon 06 May 2024 ▪ 3 min of reading ▪ by Fenelon L.
Altcoins

Recent on-chain data indicates a surge in massive sales of Ethereum by whales. This trend raises questions about their long-term perspective on the second-largest cryptocurrency by market capitalization.

Les baleines Ethereum

Are Ethereum Whales Withdrawing, a Decisive Turning Point for Crypto?

A notable case involves a whale who had bought 12,906 ETH ($24.39 million) at $1,890 each last year. Recently, this investor transferred those funds from Binance to Lido, then withdrew 7,000 ETH from Lido to redeposit on Binance, thus realizing over $16 million in profits.

This type of activity falls within a more general trend of reduced volume of large transactions, which coincides with episodes of ETH price volatility. This correlation suggests a possible influence of whale actions on market fluctuations. The significant decrease in the total volume of major transactions corresponds to periods of price instability.

The whales taking profit could be explained by Ethereum’s relatively inferior performance compared to other major cryptos such as XRP and Solana. Although not dramatic, Ethereum’s slowdown in an ever-evolving crypto ecosystem could push these large holders to reconsider their positions.

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The Influence of Whales on the Price Dynamics of Ether

The on-chain data provided by IntoTheBlock reveals a strong correlation between the price of Ethereum and the number of significant transactions. This relationship highlights the influence of these substantial trading volumes on the price dynamics of ETH.

The recent decrease in transaction volume, particularly in April, results in a drop in the price of Ethereum, suggesting that selling pressure exerted by whales has a tangible impact.

While massive sales do not necessarily mean the end of Ethereum, they do raise questions about the sustainability of its current price movements. These large-scale transfers require careful monitoring as they can indicate a shift in investor sentiment, potentially leading to more significant market readjustments.

As Ethereum whales seem to be realizing their profits and reducing their stakes, it’s critical to analyze the potential impact of these movements on the market. Although this does not necessarily predict an imminent crash, this trend underscores the need for investors to remain vigilant and closely follow the supply and demand dynamics.

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Fenelon L. avatar
Fenelon L.

Passionné par le Bitcoin, j'aime explorer les méandres de la blockchain et des cryptos et je partage mes découvertes avec la communauté. Mon rêve est de vivre dans un monde où la vie privée et la liberté financière sont garanties pour tous, et je crois fermement que Bitcoin est l'outil qui peut rendre cela possible.

DISCLAIMER

The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.