The cryptocurrency market has recently suffered a major pullback due to escalating geopolitical tensions in the Middle East, with many large-cap assets giving up their recently accumulated gains over the past week. Specifically, the price of Ethereum collapsed from over $2,600 to $2,300 at some point during the week.
This represents a new setback for the “king of altcoins,” which has not had a particularly positive performance in the past few months. Interestingly, a popular cryptocurrency expert on X made an on-chain observation about the behavior of Ethereum investors during the last quarter.
How will Ethereum whales hold their holdings affect the price
In a recent post on social media platform X, cryptocurrency analyst Ali Martinez said open A certain group of Ethereum whales have been reducing their holdings over the past few months. This on-chain detection is based on Mega-Whale Address Count, which tracks the number of addresses that hold more than 10,000 units of a given cryptocurrency.
Whales refer to entities (individuals and organizations) that own large amounts of a specific cryptocurrency (ether, in this case). Investors usually pay extra attention to the movements of whales, as these large entities tend to exert a noticeable influence on market liquidity and prices due to their large holdings.
Source: Ali_charts/X
According to Martinez, the number of whale addresses holding more than 10,000 ETH has fallen by more than 7% since July 2024. This decline in the number of large Ethereum holders indicates some reallocation or profit-taking and indicates a noticeable shift in market sentiment. Especially among large investors and institutional players.
Interestingly, this decline in whale addresses coincided with a period in which the Ethereum price suffered. Despite the approval and launch of exchange-traded funds (ETFs), the price of the altcoin fell from over $3,500 in July to $2,200 by August.
As we have already seen in the token’s price action over the past few months, a decline in the number of large Ethereum holders could reduce widespread buying pressure, leading to a slowdown in price action. Furthermore, the continued profit-taking activities of these whales could lead to increased downward pressure on the Ethereum price.
ETH price at a glance
As of this writing, Ethereum price is just above the 2400 level, reflecting a slight decline of 0.1% over the past 24 hours. The performance of the cryptocurrency on the weekly time frame is not too insignificant, as the price of ETH has fallen by almost 10% in the past seven days.
The price of ETH rebounds from $2,300 on the daily timeframe | Source: ETHUSDT chart on TradingView
Featured image from Unsplash, chart from TradingView