TL;DR
- Ethereum addresses with more than 10,000 ETH have increased.
- The Ethereum reserve on exchanges has decreased significantly.
- Technical indicators suggest a possible short-term correction.
Recent Ethereum whale activity has generated a lot of attention in the cryptocurrency market.
Last week, Ethereum experienced a roller coaster ride in price, topping $3,900 before falling back to around $3,759.66.
There’s been a notable increase in #Ethereum addresses holding 10,000+ $ETH, indicating a shift from distribution to accumulation! pic.twitter.com/afXTfpiK1I
— Ali (@ali_charts) May 30, 2024
This price movement has been taken advantage of by whales, large investors who own a significant amount of ETH, who have begun to accumulate more of this cryptocurrency.
An analysis of Ethereum addresses has revealed a notable increase in the number of addresses now holding more than 10,000 ETH.
This change suggests that whales are moving from a distribution phase, where they sell their assets, to an accumulation phase, where they buy more.
This is seen as a positive indicator, as it shows the confidence of large investors in the long-term potential of Ethereum.
Additionally,Glassnode data shows a significant drop in Ethereum balance on exchanges on May 30.
This usually indicates high buying pressure, as investors withdraw their ETH from exchanges to store it in private wallets, with the intention of holding it for the long term.
This movement is usually interpreted as a bullish signal, as it reduces the supply available for sale on exchanges.
However, not everything is positive.
According to data from CryptoQuant, net Ethereum deposits on exchanges have increased compared to the past seven-day average, suggesting increased selling pressure.
Furthermore, the “Coinbase Premium” is negative, indicating a greater willingness to sell among US investors.
Added to this are technical indicators that show that Ethereum could be overbought.
Both the Relative Strength Index (RSI) and Stochastic indicate that ETH is in an overbought position, which usually precedes a price correction.
The MACD indicator shows the possibility of a bearish crossover, and the Money Flow Index (MFI) has recorded a slight decline.
Additionally, the Bollinger Bands suggest that the ETH price is in a highly volatile zone, which could lead to significant price swings.
Short and long term outlook on Ethereum
Despite the short-term warning signs, the Chaikin Money Flow Indicator (CMF) is showing bullishness, which could help ETH surpass its $3,789 resistance sooner than expected.
This mixed performance of technical indicators and market sentiment suggests that investors should proceed with caution.
For long-term investors, Ethereum accumulation by whales and reserve drawdown on exchanges are encouraging signs.
These factors indicate strong confidence in the future of Ethereum and could justify buying, as long as you are prepared for short-term volatility.
However, for short-term traders, overbought signals and increasing deposits on exchanges suggest that it might be prudent to wait for a price correction before taking a position.
While Ethereum accumulation by whales and declining supply on exchanges are positive signs, technical indicators suggest the possibility of a short-term correction.
Investors should carefully consider their goals and risk tolerance before deciding whether to join the whales in purchasing ETH at the current price level.
