Cryptocurrency markets have recently suffered significant declines due to escalating geopolitical tensions in the Middle East, with several large assets paring their recent gains over the past week. Specifically, the price of Ethereum plummeted from over $2,600 to $2,300 at one point during the week.
This marks another setback for the “king of altcoins,” which has not performed particularly well in the past few months. Interestingly, a popular crypto expert on X came forward with on-chain observations regarding Ethereum investor behavior over the past quarter.
How does Ethereum whales chipping away at their holdings affect the price?
In a recent post on social media platform This on-chain exposure is based on the Mega-Whale Address Count, which tracks the number of addresses with more than 10,000 units of a particular cryptocurrency.
Whales are entities (individuals and organizations) that own large amounts of a particular cryptocurrency, in this case Ether. Investors typically pay particular attention to whale movements, as these large companies tend to exert significant influence on market liquidity and prices due to their large holdings.
Source: Ali_charts/X
According to Martinez, the number of whale addresses holding 10,000 ETH or more has decreased by more than 7% since July 2024. This decline in the population of large Ethereum holders suggests some kind of redistribution or profit-taking, and signals a significant shift in market sentiment. This is especially true among large and institutional investors.
Interestingly, this decline in whale addresses coincided with a period of low Ethereum prices. Despite the approval and launch of the Spot ETH Exchange Traded Fund (ETF), altcoin prices have fallen from over $3,500 in July to $2,200 in August.
As we have already seen in the token’s price movement over the past few months, the decline in large Ethereum holders could reduce large-scale buying pressure and lead to slower price movements. Additionally, continued profit-taking activity by these whales could increase downward pressure on ETH price.
ETH price overview
At the time of writing, Ethereum price is just above the 2,400 level, reflecting a slight decline of 0.1% over the past 24 hours. The weekly performance of the cryptocurrency is not that important as ETH price has fallen by nearly 10% in the past 7 days.
ETH price rebounds from $2,300 on daily basis | Source: ETHUSDT chart on TradingView
Featured image from Unsplash, chart from TradingView
