- Ethereum whales are increasing their holdings, but network growth is slowing.
- ETH gains slightly, but investors hold on to a $4k mark.
Ethereum[ETH] witnessed a significant increase in recent days despite rumors of a possible rejection of the approval of the Spot ETF.
Interest in whales is increasing
One factor that contributed to the rise in the price of ETH was the activity of large holders.
According to Lookonchain’s data, a significant whale with 120,874 ETH, worth $370.6 million, deposited 15,000 ETH worth $46 million into Kraken on May 20.
This same whale withdrew 120,874 ETH worth $199 million, priced at $1,647 each, from Kraken between August 31, 2022 and September 9, 2022, leaving 105,874 ETH worth $325.3 million.
Consequently, the investor’s profit amounted to $171.5 million.
Source:
Trouble ahead
The significant accumulation of whales could further push the price of ETH to new levels. The price could regain $3,500 soon if the bullish momentum continues.
However, there may be some challenges that ETH may face in the future.
At the time of writing, network growth for ETH had plummeted, meaning new addresses were slowly losing interest in the altcoin.
While this may help ETH’s cause in the short term, ETH needs to be able to attract new addresses for long-term growth.
Coupled with this, the velocity of ETH had also decreased, implying that the frequency with which ETH was traded had also decreased.
Source: Santiment
How are the holders doing?
Despite the price increase, most ETH holders were unprofitable at the time of writing. This was indicated by ETH’s MVRV ratio, which had fallen.
A negative MVRV ratio meant that ETH still had room to grow before profit-taking could occur and a slight price increase could be expected.
However, the Long/Short ratio for ETH had dropped significantly, showing that the number of long-term holders accumulating ETH had dropped.
Read Ethereum’s [ETH] Price forecast 2024-25
If there are many short-term holders, this could lead to an increase in volatility for ETH in the future, as they are more likely to sell their holdings in times of uncertainty, while long-term holders are more resilient.
Source: Santiment
At the time of writing, ETH was trading at $3,107.09 and its price had risen 0.67% over the past 24 hours.