The Ethereum market is picking up steam after a long-dormant “whale”, a major investor holding huge amounts of the cryptocurrency, re-emerged and transferred a significant amount of ETH to the Kraken exchange. The move has sparked speculation about a potential price drop, but broader market trends present a more complicated picture.
Spot On Chain, an on-chain analysis company, revealed that an investor who participated in the Ethereum Initial Coin Offering (ICO) in 2014 recently deposited 1,069 ETH, worth about $3.56 million, in Kraken.
Traditionally, deposits on exchanges are seen as a signal of selling intent, potentially putting downward pressure on the price of ETH.
This whale’s activity is particularly notable for its participation in the Ethereum ICO. In 2014, they acquired 12,566 ETH for as little as $0.30 per token. Although the recent transfer represents only a fraction of the holdings, the sale price of over $3,300 per ETH represents a huge profit for early investors.
not #Ethereum #ICO The participant returned 1.12 years later and deposited 1,069. $ETH (USD 3.56 million) ~ #kraken It was $3,329 3 hours ago.
Whale received 12,566 $ETH In ~ #Ethereum July 2015 Genesis, ICO price ~$0.31;
Then we distributed it. $ETH In 2017, it spanned 12 wallets, of which… pic.twitter.com/Lid1hItGik
— Spot on Chain (@spotonchain) April 6, 2024
Ethereum Market Shows Signs of Accumulation
While whale movements may suggest a potential sell-off, on-chain data shows a broader trend that could offset the impact. Cryptocurrency exchanges saw significant outflows of ETH totaling $4 billion last quarter, according to blockchain analytics firm IntoTheBlock.
This movement suggests that many investors are accumulating ETH and potentially anticipating future price increases.
Ether market cap currently at $409 billion. Chart: TradingView.com
Dencun upgrade boosts Ethereum network activity
This news comes on the heels of Ethereum’s successful Dencun upgrade, which was implemented in March 2024. The upgrade aimed to address the network’s scalability issues, specifically targeting high transaction fees and slow processing times.
Early signs appear positive, with IntoTheBlock reporting a surge in activity for key bullish rollups (layer 2 scaling solutions) following the upgrade.
Weekly transaction volume peaked at 32 million, indicating increased network usage. Although gas prices have increased recently, many Layer 2 solutions initially saw significantly lower gas prices after upgrades.
Market uncertainty remains
The combination of the effects of whale sales, broader accumulation trends, and the impact of the Dencun upgrade on network activity makes it difficult to predict the near-term direction of the Ethereum market.
While whale sales may trigger price declines, the broader accumulation trend suggests an underlying bullish sentiment. If the Dencun upgrade succeeds in reducing transaction fees and increasing network usage, investor confidence could be further strengthened.
Featured image from Pexels, chart from TradingView
Disclaimer: This article is provided for educational purposes only. This does not represent NewsBTC’s opinion on whether to buy, sell or hold any investment, and of course investing carries risks. We recommend that you do your own research before making any investment decisions. Your use of the information provided on this website is entirely at your own risk.
Source: NewsBTC.com