Ethereum is facing a challenging situation as recent data shows a significant drop in holdings by large investors, also known as whales. According to blockchain analytics, the number of Ethereum addresses holding more than 1,000 coins has reached a 10-month low of 6,268. This low was last seen in November 2022 with a slightly higher count of 6,270.
📉 #Ethereum $ETH Number of Addresses Holding 1k+ Coins just reached a 10-month low of 6,268
Previous 10-month low of 6,270 was observed on 02 November 2022
View metric:https://t.co/iDNXAbcjH1 pic.twitter.com/SNVGSIJR0j
— glassnode alerts (@glassnodealerts) May 31, 2023
In-depth Analysis Reflects a Possible Lost in Faith from Investors
This downward trend of whale holdings is usually a negative sign, indicating that major investors may be losing confidence in Ethereum’s short-term prospects. Such a change in the sentiment of influential investors often has a noticeable impact on the market, mainly because their transactions are large enough to affect Ethereum’s price.
Currently, Ethereum trades at around $1,870, approaching the 50-day Exponential Moving Average (EMA). As the second-biggest cryptocurrency in terms of market value, this technical level might be a possible area of price convergence. However, the lower trading volume suggests that traders are losing interest, which could have an impact on Ethereum’s price steadiness.
There could be various reasons behind the movements of whale investors. One possible explanation for the decline in Ethereum’s whale addresses is that some large investors are cashing out after the recent price surges, while others are adjusting their portfolios according to the market movements.
Another factor that could be influencing the whales’ behavior is the persistent issue of Ethereum’s limited scalability and high gas fees, which might discourage some whales from holding on to their assets.
It is important to mention that Ethereum is on the verge of receiving a major upgrade aiming to improve scalability, security, and sustainability. This upgrade might affect investor sentiment as the potential risks and benefits of the transition become clearer.
The diminished holdings of Ethereum by whales might seem worrying for some investors, as it can indicate a loss of confidence or signal a market downturn. However, Ethereum still has a lot of potential and innovation to offer, and the upcoming upgrade could be a game-changer for its long-term future.
