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Ethereum (ETH) Whales Dump Holdings, Market Faces Challenges

source-logo  blockchainreporter.net 31 May 2023 09:37, UTC

Recent data has unveiled a significant setback for the Ethereum (ETH) market as major investors experience a notable decrease in holdings. Glassnode, a blockchain analytics firm, reports that Ethereum addresses holding 1,000 or more coins have plummeted to a 10-month low of 6,268. This figure closely resembles the count from November 2022, when it stood slightly higher at 6,270.

The decline in whale holdings signals a bearish outlook, indicating that major investors may be losing confidence in Ethereum’s short-term potential. This change in sentiment among influential investors can significantly impact the market, mainly due to the substantial size of their transactions, which have the power to influence Ethereum’s price.

📉 #Ethereum $ETH Number of Addresses Holding 1k+ Coins just reached a 10-month low of 6,268

Previous 10-month low of 6,270 was observed on 02 November 2022

View metric:https://t.co/iDNXAbcjH1 pic.twitter.com/SNVGSIJR0j

— glassnode alerts (@glassnodealerts) May 31, 2023

Impact on Market Looms

At present, Ethereum is trading at approximately $1,870, edging closer to the 50-day Exponential Moving Average (EMA). This technical level has the potential to serve as a consolidation point for the second-largest cryptocurrency by market capitalization. Nevertheless, the declining trading volume suggests waning interest among traders, which could impact the stability of Ethereum’s price.

The motivations behind these movements among whale investors can be attributed to various factors. Some whales may be capitalizing on Ethereum’s previous price surges to secure profits, while others might be adjusting their asset allocations in line with market trends. Additionally, concerns regarding Ethereum’s scalability and high transaction fees could be prompting certain whales to decrease their holdings.

It is worth highlighting that Ethereum is on the cusp of a significant upgrade that aims to enhance scalability, security, and sustainability. This upgrade holds the potential to influence investor sentiment as the risks and benefits of the transition become more apparent. However, whales’ reduced holdings of Ethereum may raise concerns among certain investors, as it could signify a loss of confidence or indicate a potential market downturn.

This bearish outlook, signaled by major investors losing confidence in the short-term potential of Ethereum, can have a significant impact on the market due to their substantial transactions. While Ethereum is approaching a consolidation point near the 50-day Exponential Moving Average, the waning interest among traders raises concerns about price stability.