Ethereum

Ethereum Whale Activity Signals Potential Bullish Reversal Amid Market Trends

2 weeks ago
Bitcoin Ethereum News

Whale activity has seen an uptick of late, with large-scale investors not just taking notice of Ethereum (ETH), but also making significant purchases of it.

Over the past day, Ethereum whales have added a remarkable 140,000 ETH to their accounts. And while it’s debatable just how much or how little these sort of moves by whales impact the prices of the assets they buy, whale accumulation certainly doesn’t give off a bearish vibe for any asset. And the eth price is moving up and to the right.

Bullish Divergence Suggests Strong Reversal Ahead

In recent days, an interesting occurrence has been afoot with Ethereum’s price action. Even as the price continues to dip, a bullish divergence is appearing, hinting that maybe the current market isn’t quite as bearish as it seems. When a bullish divergence occurs, it usually means that the buying pressure is rising while the price of an asset is going down. Uphold, the popular crypto wallet and custody service, allows for the purchase and trading of Ethereum, and its executive team has a good deal of experience and knowledge working with and within cryptocurrency.

During this time, whale accumulation of ETH only reinforces the argument for a likely price reversal. Whales are typically considered well-informed investors who make decisions based on insider knowledge or advanced market data. They are seen as having an edge because they make moves ahead of the wider market. So, when we look at what the whales are doing with ETH, it seems like these larger and better-informed players are moving confidently toward the asset despite its recent price struggles. It stands to reason that a more favorable price development is in the offing.

In addition, the buying from takers, which reflects the market orders executed by buyers, has been steadily rising. When buyers in a falling market are willing to pay the prices needed to execute market orders, it generally shows that there is a strong demand from buyers—even if the rest of the market might be indicating something different. This uptick in buying activity from market-shy buyers could be Bullish for Ethereum.

Ethereum’s Institutional Activity and ETF Outflows

Although whale behavior and price trends are highly significant aspects of Ethereum’s potential upward price movement, the activity of institutions, especially major ones like investment banks and hedge funds, gives us even clearer insight into the market’s future direction. On February 20, Ethereum endured what can only be described as a pretty nasty outflow from its US spot ETF to the tune of $13.09 million.

But ETF outflows aren’t precisely an entirely bad sign. They could be a sign of something very different. As ETFs have been used to gain exposure to crypto assets, we might be seeing ETF investors pulling out because they’ve lost faith in crypto as an asset class. Alternatively, we could simply be seeing temporary some outflows, with investors pulling funds during periods of volatility before reentering once market conditions stabilize. Indeed, Ethereum’s network fundamentals are as strong as ever.

The outflow from the Ethereum ETF could also represent just a temporary market correction. With institutional investors seemingly moving into safer assets during uncertain market conditions, the behavior we’re seeing with the Ethereum ETF could simply be our time-honored spectral visitation from the “investors might be re-entering when the market finds its footing again” ghost. If the price of Ethereum stabilizes or starts to rally, our current spectral visitation signaling temporary profit-taking from these funds could also go into reverse gear.

A Potential Breakout on the Horizon?

Accumulation by whales, the appearance of bullish divergences, and outflows of institutional ETFs create a tantalizing trifecta for Ethereum. The Grayscale Ethereum Trust is currently experiencing an outflow of capital alongside other recent institutional ETF outflows. Grayscale’s Ethereum Trust has been a vehicle for large institutional investments into Ethereum. Ethereum’s current market cap is $240 billion—8% of the total cryptocurrency market cap, and 19.61% of the total Ethereum market cap.

While the market awaits more developments, these factors combined make a strong case for a sentiment shift—specifically, a shift toward a positive sentiment. Investors will of course be watching closely to see what happens with Ethereum’s price in the very near term. We could hardly be at a more pivotal moment for the cryptocurrency. If Ethereum can demonstrate any sort of upward momentum, it will almost certainly ignite a wave of new buying interest across the market. And a lot of people seem to think that Ethereum is on the verge of doing just that.

To conclude, although the recent price drop and institutional outflows from Ethereum’s ETF may give rise to doubts, the overall market picture—especially the goings-on with whales and the newly seen bullish divergence—indicates that Ethereum is likely to be on the verge of a pretty substantial reversal. If these developments keep unfurling in the same direction, then Ethereum is undoubtedly set up for a major breakout soon.

Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any service.

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Source: https://nulltx.com/ethereum-whale-activity-signals-potential-bullish-reversal-amid-market-trends/