As the broader crypto market remains on edge, altcoins, especially Ethereum, are facing considerable downward pressure. In Q4, Ethereum has been navigating a descending channel, reflecting ongoing bearish sentiment. The world’s largest altcoin saw a notable drop of 10.9%, hitting a five-month low of $2650, before slightly bouncing back to $2720 at the time of reporting. Interestingly, this prolonged decline has created a chance for purchasing. Especially for large investors and institutions. Ethereum whales are making notable moves by actively buying during the dip! As Ethereum reaches a 5-month low, significant investors are taking advantage of the situation to purchase the altcoin at a favorable price. Despite the decline throughout November, whale activity has shown a notable persistence, remaining relatively high in comparison to prior months. For instance, data has indicated notable large orders throughout the past month. Such sustained large orders suggest an increase in involvement by significant players, particularly large investors, on both the demand and supply fronts.
Sources has pointed out several orders arising from the demand side. To kick things off, the “66,000 Borrowed Whale” has made headlines by purchasing a significant amount of ETH valued at $162.77 million from Binance and subsequently supplying it to Aave V3. Following this acquisition, the whale increased his holdings to 432,718 ETH, which is now valued at $1.23 billion. Three additional whales acquired 9,974 ETH, valued at approximately $30 million. In a significant update, the last accumulating address has been recognized as associated with Tom Lee’s Bitmine. Bitmine has indeed acquired an additional 17,242 ETH, valued at $49.07 million, through partnerships with FalconX and BitGo. In total, these holders have accumulated an impressive $241.84 million in ETH. Often, strong buyers take advantage during a downturn, viewing the decline as an excellent chance. Large investors are demonstrating significant optimism regarding future price increases, despite the recent downturn.
As large investors gather assets, the availability of Ethereum on trading platforms is decreasing. Reports says that Ethereum’s Exchange Reserves have fallen to a 55-month low, currently at 15.6 million, valued at $42.9 billion. This sharp drop suggests that these whales have absorbed a significant amount of the available supply. Generally, a restricted availability on trading platforms results in a decreasing pool of sell-side liquidity. In the past, insufficient sell-side liquidity has frequently indicated an upcoming increase in prices. Especially since fluctuations tend to lessen when ownership shifts to more stable investors. Interestingly, despite a rise in whale accumulation, there has not been a positive impact on the price movement. Especially as Ethereum keeps showing a fundamentally negative trend. The price charts indicate a consistent downward trend, as shown by the Stochastic Momentum Index. The index has indeed fallen to -74.69, signaling a significant presence of sellers in the market.
At the same time, the Advance-Decline Ratio remains below 1, further supporting the indication of downside strength. These market conditions might pave the way for additional drops in ETH. If the bearish trend persists, ETH could drop to $2535. However, if significant demand from large investors emerges, it could drive ETH and help it regain the $3k level in the near future.