Ethereum’s Declining Holdings: A Cause for Concern
Recent on-chain activities have raised concerns about Ethereum’s future in the crypto market. One alarming trend is the decline in the number of addresses holding significant amounts of Ethereum, indicating potential liquidation by long-term holders.
Whale Watch: Decrease in Ethereum Holdings
Glassnode, a leading on-chain analytics platform, reports that the number of addresses holding 1,000 or more Ethereum coins has reached a 5-year low, currently standing at 6,082. These addresses are often referred to as “whale addresses” and their decreasing numbers suggest significant selling pressure.
When large-scale holdings of a cryptocurrency like Ethereum are sold off, it can create panic among smaller investors, leading to further selling and a possible price drop.
Additional Pressure from Dormant Wallets
In addition to the decline in large-scale holdings, another factor contributing to Ethereum’s selling pressure is the sudden activity of a dormant wallet that had remained untouched for four years. This wallet recently liquidated its entire ETH holding, injecting around $4.81 million worth of Ethereum into the market.
Such unexpected sales from long-inactive wallets can cause alarm in the market and intensify selling pressures on the affected cryptocurrency.
Ethereum’s Price Outlook
Despite these concerns, Ethereum has experienced a slight bullish trajectory over the past week, with its price increasing by 1.4%. It reached a high of $1,650 before retracing to $1,626 at the time of writing, representing a 1.8% decrease in the past 24 hours.
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Hot Take: Ethereum’s Future Amidst Declining Holdings
Ethereum’s declining holdings and the liquidation activities of long-term holders raise concerns about its value and market stability. The decrease in whale addresses and unexpected sales from dormant wallets indicate potential selling pressure, which could lead to further price drops.
However, despite these challenges, Ethereum has shown some resilience with a slight bullish trend in its price. It remains to be seen how the market will respond to these developments and whether Ethereum can maintain its position as a significant player in the crypto space.
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