Recent data suggests a notable change in Ethereum market dynamics, with large holders reducing their positions, although overall sentiment remains cautiously optimistic.
ETH Whale Holdings falls amid heavy gains
According to a recent report, the number of Ethereum whales (defined as addresses holding 10,000 ETH or more) has decreased by more than 7% since July. This significant decline in large holdings may indicate a change in strategy among high-net-worth investors, which could impact Ethereum’s long-term market outlook.
Despite the decline in whale activity, data from IntoTheBlock reveals that 62% of Ethereum holders are still making profits. This suggests that although there has been some volatility in recent months, market conditions remain favorable for the majority of investors. Profitable holders are generally more likely to hold on to their positions, which can bring some stability to the market.
Ethereum network activity spikes after Dencun upgrade
CryptoQuant data shows a series of spikes in Ethereum net inflows, indicating increased demand and activity on the network. After a recent drop, inflows appear to be increasing again. Such movements often precede stronger price movements, as increased capital inflows can lead to increased buying pressure.
Ethereum’s recent Dencun upgrade has brought significant changes within its ecosystem. The implementation of EIP-4844 led to a surge in Layer 2 (L2) transactions while lowering mainnet fees to an all-time low. This change improved the scalability of the network, but it also caused Ethereum to become inflationary, reversing the recent deflationary trend.
Mixed market sentiment and future outlook
Analyzing Coinglass’s long/short ratio reveals fluctuations between short and long positions. As of the latest data, this ratio is 1.01, suggesting that long positions have a slight advantage in the market.
While the decline in whale holdings is notable, overall market sentiment towards Ethereum remains positive. With the majority of holders profiting and network activity increasing, Ethereum may be poised for further price fluctuations. However, inflationary pressures due to rate reductions are creating new challenges for network operations.
