Ethereum hits six-month high as sharks, whales play dump and catch
- Whales have been on a dumping spree in the past year, while sharks have been scooping up.
- ETH’s price is over $1,700 for the first time in over six months.
Since the unfortunate events of 20222, Ethereum (ETH) has been fighting against the odds to recover and return to its previous price position.
However, during the past year, there has been a shift in the positions of large addresses toward their ETH holdings.
Read Ethereum (ETH) Price Prediction 2022-23
The Ethereum dump and scoop
Traders known as “whales” and “sharks” on Ethereum have seen a dramatic change in their portfolios over the past year, as reported by a recent post by Santiment.
By comparing the two groups’ charts, we can see that the proportion of whale holdings has decreased while that of sharks has increased. While whales have sold off 9.43 million ETH, sharks have added 3.61 million to their stash over the past year.
There has been a lot of selling pressure on Ethereum, and the activity of the whales over the past year and the amount dumped thus far are symptomatic of this. Even though the sharks’ stockpile was minor, it mitigated the effects of a sharp price drop.
Two MVRVs, one Ethereum
Ethereum has been undervalued for a long period, as shown by its Market Value to Realized Value (MVRV) ratio being below the breakeven point for 365 days.
In November 2022, it reached a low of -49%. With the MVRV in the red, sellers had greater reason to cut their losses, and the price followed suit.
As the price of the asset dropped during the sell-off, sellers suffered a hit, allowing new buyers to enter the market at a lower price.
A review of the 30-day MVRV revealed that buyers who had entered the trade within the previous 30 days had remained profitable for the most part.
As of this writing, the MVRV ratio was close to 5%. Even if the price dropped and there was an apparent sell-off by some whale addresses, the shark addresses that added to their stack are likely to be in profit.
ETH price hits six months high
The value of Ethereum (ETH) has steadily risen over the past week. As of this writing, it gained close to 4% in a day’s trade, trading at roughly $1,740.
A closer examination of the daily timeframe chart revealed that the current price range was the highest in over six months. Also, support was forming around the $1,430 price level, with the support area depicted by the short Moving Average (blue line).
Is your portfolio green? Check out the Ethereum Profit Calculator
Despite the dump by the whales, the supply of Ethereum on exchanges has not increased, as seen by the supply on exchanges indicator on Santiment.
As of this writing, there was a net drop in the amount of ETH supplied to exchanges—about 12.9 million ETH were available on trading platforms.
Ethereum sees some whale and retail demand, but here’s the issue
- ETH sees demand from whales and retail investors but in low volumes.
- ETH TVL in Ethereum 2.0 soars to new ATH.
The Ethereum network’s next major upgrade dubbed Shanghai is less than a month away. Major network upgrades usually attract some investor interest days before the actual date of the event. Now, the question is- Will the same scenario play out for ETH?
Is your portfolio green? Check out the Ethereum Profit Calculator
Recent data reveals that ETH is experiencing noteworthy demand, especially from retail investors. There are currently over 23.3 million addresses holding at least 0.01 ETH and those addresses are currently at an 8-month high.
This confirms that retail buyers have been accumulating, perhaps in anticipation of some upside as the Shanghai countdown narrows.
📈 #Ethereum $ETH Number of Addresses Holding 0.01+ Coins just reached a 8-month high of 23,363,445
View metric:https://t.co/XXb0u19Wkf pic.twitter.com/NRmVrvOi13
— glassnode alerts (@glassnodealerts) March 26, 2023
But how does this match up to the level of demand from the whales or institutional buyers? A quick glance at the state of addresses holding over 1,000 and over 10,000 ETH reveals that they have been adding to their balances in the last seven days. This confirms that larger addresses or whales have also been accumulating the king alt.
Things also look favorable for Ethereum on the DeFi front. The network’s TVL data revealed that the total value locked in ETH 2.0 deposit contracts has been growing. It recently reached a new all-time high (ATH) of 17.06 million ETH. It confirms that Ethereum 2.0 is still on a healthy growth trajectory.
📈 #Ethereum $ETH Total Value in the ETH 2.0 Deposit Contract just reached an ATH of 17,061,207 ETH
View metric:https://t.co/SzbMPqvhlb pic.twitter.com/eHxVwDn43i
— glassnode alerts (@glassnodealerts) March 25, 2023
So, if the whales and retail segment are buying, why is ETH’s price not experiencing a massive rally?
Exchange flows may provide a reasonable answer. The volume of ETH flowing in and out of exchanges is down notably in the last seven days. It implies that the prevailing volumes are weaker, hence a lower impact on price action.
However, the latest Glassnode readings revealed that the ETH exchange outflow volume was almost double the exchange inflow volume.
These flows were responsible for curtailing ETH’s downside on Saturday (25 March) and a 3.6% uptick within the last 24 hours to its $1778 press time price.
How many are 1,10,100 ETHs worth today?
Although ETH is currently demonstrating some bullish signs, investors should note that the volumes are still low. The cryptocurrency has been stuck in a saturated performance for the last few days. Capitulation is still a likely outcome that may lead to a resurgence of sell pressure in the next few days.
Investors should watch for whether ETH demand will continue increasing in the next few days. This would give insights into what to expect.
Nasdaq Aims To Launch Crypto Custody Services In Second Quarter
Nasdaq intends to launch its custody services for digital assets like bitcoin by the end of this year’s second quarter. The exchange operator is among those traditional financial firms that want to play a role as intermediaries in the crypto sector which saw the collapse of some major players.
Stock Exchange Nasdaq Seeks Regulatory Approval as Crypto Custodian
U.S. exchange operator Nasdaq plans to launch its own custody services for crypto assets by the end of June. The company moves into the industry in the aftermath of a series of failures such as the bankruptcy of FTX, one of the largest cryptocurrency exchanges.
The group is now working to obtain the necessary approvals from regulatory bodies that will allow it to provide such services, Bloomberg reported on Friday, quoting Ira Auerbach, senior vice president and head of Nasdaq Digital Assets.
Nasdaq has already applied to the New York Department of Financial Services for a limited-purpose trust company charter, which would oversee the new crypto business, the executive revealed in an interview in the French capital.
The initiative was first announced in September. It represents the first inroad into the crypto economy for the company which runs the second-largest American stock exchange by market capitalization of the traded shares.
The realization of the project will start with safekeeping the leading cryptocurrencies, bitcoin (BTC) and ether (ETH), before expanding the array of services offered by the group’s digital assets division. The plan is to eventually provide execution for financial institutions.
The crypto winter caused by falling prices affected banks exposed to digital assets as well, leading to the collapse of the crypto-friendly Silvergate Bank and Silicon Valley Bank in the U.S.
In the crypto market, Nasdaq will join large financial firms, like BNY Mellon and Fidelity, offering custody for cryptocurrencies, intermediary services, or tokenization of traditional assets to utilize the advantages of related technologies.
Tags in this story
banks, Bitcoin, BTC, collapses, Crypto, crypto assets, crypto exchange, crypto industry, crypto market, Crypto Winter, Cryptocurrencies, Cryptocurrency, custodian, custody, Custody Services, Digital Assets, ETH, ether, Exchange, Exchange Operator, ftx, nasdaq, stock exchange
Do you expect other major finance firms to enter the crypto space this year? Tell us in the comments section below.
Lubomir Tassev is a journalist from tech-savvy Eastern Europe who likes Hitchens’s quote: “Being a writer is what I am, rather than what I do.” Besides crypto, blockchain and fintech, international politics and economics are two other sources of inspiration.
Image Credits: Shutterstock, Pixabay, Wiki Commons, nikkimeel / Shutterstock.com
Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.
Ethereum holders might be elated to know this about exchange balance
- Ethereum exchange balance hit a five-year low as more holders moved their assets to self-custody options and DeFi platforms.
- The decline in exchange balance can be attributed to factors such as the rise of DeFi, the switch to PoS, and the downturn in the crypto market.
The beginning of the year ushered in a whirlwind of events that significantly influenced the crypto industry, with Ethereum being (ETH) no exception.
The current state of affairs, including the SEC’s regulatory crackdown and potential bank runs, has undoubtedly left ETH holders feeling disillusioned. However, other factors might be responsible for the dwindling ETH exchange balance.
Read Ethereum [ETH] Price Prediction 2023-24
Ethereum exchange balance declines
In 2022, the FTX crash sent shockwaves through the crypto world, causing many holders to question the safety of keeping their assets on exchanges.
The incident sparked a renewed interest in self-custody to secure crypto holdings. However, while Ethereum experienced a decrease in exchange balances in the months following the crash, this trend can be attributed to other factors beyond fear of exchange insecurity.
Ethereum exchange netflow flashes negative
According to a recent Glassnode chart from Glassnode alerts, the balance of Ethereum held on exchanges has been steadily decreasing.
As of this writing, the exchange balance had reached a five-year low, hovering just above $18 million. This trend indicates that more ETH holders are opting for alternative storage methods rather than leaving their assets on exchanges.
In addition, a closer examination of Ethereum’s exchange netflow reveals that the outflow of ETH from exchanges has exceeded the inflow, with few exceptions of inflow spikes.
Currently, the netflow of ETH on exchanges remains negative, with outflow continuing to dominate. At the time of writing, the netflow had surpassed 11,000 ETH already, highlighting the ongoing trend of ETH holders moving their assets away from exchanges.
Possible reasons for declining exchange balance
One possible factor is the rise of decentralized finance (DeFi) platforms built on the Ethereum network. Many holders have moved their funds from centralized exchanges to DeFi protocols to earn higher yields.
The yields come through liquidity provision, staking, or other forms of participation in decentralized finance. Also, ETH stakes account for 15% of the coins in circulation per staking rewards.
It is also possible that some holders took a more long-term investment approach by holding their assets in personal wallets. It is a means of storing value and avoiding short-term trading risks.
Also, the crypto market experienced a downturn in the latter half of 2022. The downturn may have led some holders to move their assets off exchanges and into personal wallets.
Daily timeframe move and 365-day MVRV
Despite experiencing a decent price run, Ethereum (ETH) had yet to regain the price zone it dropped back in May. As of this writing, it was trading at approximately $1,740 and had sustained losses for two consecutive days. However, ETH had maintained a support level of around $1,732 and $1,630, previously resistance levels.
Is your portfolio green? Check out the Ethereum Profit Calculator
The 365-day Market Value to Realized Value ratio (MVRV) revealed that for most of the period being analyzed, ETH was trading below zero.
However, as of this writing, the MVRV had surpassed the zero line and currently sat at 13.60%. This indicated that, on average, the holders of ETH were now profitable, given the price at which they acquired their coins.
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