Ethereum Whales Show Signs of Panic-Selling Amidst Market Uncertainty

The current Ethereum market is characterizing itself by amounts of volatility that one hasn’t been able to witness since the summer of last year.

It appears that bullish whales have started retreating—some, apparently, selling off their Ethereum totals in staggering halves—while the mostly bearish subsets of sophisticated traders and retail investors have been roughing up the price (between $1,200 and $1,300 at the moment). Where is it all going? Who knows. But it feels like there’s a tug of war aspect between the two kinds of traders right now.

Whales Take Action: A Surge in Selling and Buying

The price fluctuations of Ethereum mainly come from the actions of large shareholders—whales—who are able to move the market significantly when they buy or sell at large volumes. Just recently, one outstanding whale wallet, identified as 0xc725…839d, sold off about 8,074 Ethereum, worth $19.63 million, at an average price of $2,431. And this all happened just a little over 12 hours ago! Suffice it to say, this transaction and the level of panic it implies from this seller—who most likely is just reacting to the overall market craziness at this moment—could have some serious implications up ahead for the price of Ethereum.

In addition to this, another large wallet, 0x07Fe…A26D, sent 10,000 Ethereum, around $23.44 million worth, to the Binance exchange over the last two days. Sending this amount of Ethereum to an exchange usually means the whale is about to sell, and it definitely reinforces the idea of panic-selling driving the current market movement.

Even with the marked pressure to sell, it’s worth pointing out that the big holders of Ethereum have been quite active themselves—in a positive way. They’ve come in very recently and bought up a substantial amount of Ethereum. We’re talking 110,000 Ethereum here, just over the last three days. And what’s that telling us? Well, if we’re using these holders as a kind of stooge to peer into the current market for Ethereum, it seems like the optimism and the demand are very much alive.

Ethereum Spot ETF Faces Continued Outflows

Along with the actions of single whales, the overall market sentiment around Ethereum is also reflected in the activity of institutional investors. February 26 saw the Ethereum spot ETF take a net outflow of $94.27 million. This marked the fifth consecutive day of outflows. In the matter of just the first two months of this year alone, the total accumulation of net outflows for the Ethereum-focused ETF had reached ($285.806 million). As those who are tending the ETF are seen as institutional investors, it is no good sign when they are tending to the ETF by taking out flows and not putting in flows.

The outflows from the Ethereum spot ETF, which track the price of Ethereum, suggest that big institutional players are losing faith in the cryptocurrency. The persistent withdrawal of funds might be an indication that these investors are seeking safer assets, possibly due to concerns over regulatory uncertainty or the overall crypto market.

What Does This Mean for Ethereum’s Price?

Panic-selling by whales, outflows from the Ethereum spot ETF, and recent volatility in the market combine to raise a lot of important questions about Ethereum’s short-term price outlook. Large sell-offs by whales have historically had a pretty big effect on market sentiment, usually leading to further price declines. But that recent buying activity by whales could indicate that some market participants are now viewing this as an opportunity to accumulate Ethereum at lower prices could also mean that we won’t see a massive further downturn.

In the next few days, everyone’s attention will be focused on whether the buying pressure from whales can counterbalance the selling frenzy or whether the market will continue to decline. If the price of Ethereum keeps dropping, could we see the whales panicking and causing further downward pressure? Or might we see the last few panic sellers getting out of the way for the price to establish a base and get ready for a recovery?

External factors, like regulations, influence the price of Ethereum, just as they do for Bitcoin. What the powers that be say and do, especially the ones in charge of our laws, tends to end up in the price chart somehow. If tomorrow the SEC announces that Ethereum is a security, prices will probably drop fast. If it says Ethereum is not a security and it’s free to be traded, prices will probably rise fast. This is how external influences work. They work fast.

Conclusion: A Market in Flux

Currently, Ethereum’s market is in a state of flux, with major whales both selling and buying large amounts of the cryptocurrency. Over the past week, there has been some panic-selling. This, combined with the significant outflows from the Ethereum spot ETF, suggests that market sentiment is leaning toward caution. Yet, the substantial buying activity from whales in the last 72 hours might indicate a potential rebound or accumulation phase.

With Ethereum’s still-volatile price, investors need to brace for more short-term ups and downs. Will the market follow the path of past recoveries—sharp but over all somewhat short-lived? Or has it entered a drawn-out downturn? That’s the challenge now for Ethereum traders and investors, and they’re doing what they can to try to get a handle on it: watching whale activity, ETF trends, and just plain old price action.

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

Follow us on Twitter @themerklehash to stay updated with the latest Crypto, NFT, AI, Cybersecurity, and Metaverse news!

Image Source: stevanovicigor/123RF // Image Effects by Colorcinch