Here’s Why A Ethereum (ETH) Supply Shock May Be On Its Way
Despite struggling prices, Ether (ETH), the native token of the Ethereum blockchain, has continued to move massively on-chain. In the last few hours, 20,000 ETH (worth around $57.3 million) was transferred in a single transaction.
Ethereum whale transactions pick up momentum
Per data from WhaleAlert, a tool that tracks high-volume crypto transactions on-chain, both the wallets of the sender and receiver are unmarked Whale wallets.
WhaleAlert’s data also shows that the transaction is the third whale level on-chain ETH movement that has happened in the last 24 hours. In one of the previous transactions, two unknown wallets exchanged 54,000 ETH (worth $155.8 million at the time).
Another single transaction of 11,000 ETH ($31.5 million) was also picked by the tool. The massive whale activity remains a two edged-sword for the Ethereum market. For one, if the whales decide to exit the position, it could place significant sell pressure on ETH.
Experts opine that it takes around $15million to $30 million of sell pressure to move the price of ETH down by 2% on any exchange. However, on-chain data does not yet suggest the presence of such pressure.
According to data shared by Glassnode, the past week has seen a net outflow of ETH from centralized exchanges. Specifically, outflows from exchanges amounted to $1.4 billion.
With ETH leaving exchanges, a supply shock that could send prices higher could come into play with the ongoing whale activity.
Ethereum whales accumulating Bitcoin and other altcoins
Ethereum whales have also been noted to be exerting their influence in the market of several tokens. Going by WhaleStats’ data, a platform that tracks the activity of the biggest Ethereum investors have been sweeping up Shiba Inu (SHIB), Wrapped Bitcoin (WBTC), FTX Token (FTX), and ApeCoin (APE).
While the trend has been noted for a while, the whales have largely shifted their focus from predominantly investing in SHIB to giving tokens like FTX and APE aggregate dominance among their holdings.
Meanwhile, the price of ETH, like the rest of the crypto market, has been dumping recently. On the day, ETH is trading at around $2,900, down 0.07% in the last 24 hours. The current price marks a 6.4% drawdown from its price one month ago.
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