The Ethereum market is buzzing after a long-dormant “whale” – a major investor who owns a huge amount of cryptocurrency – resurfaced and transferred a significant amount of ETH to the Kraken exchange. The move has led to speculation about a possible price drop, but broader market trends indicate a more complex picture.
On-chain analytics firm Spot On Chain has announced that the investor, who participated in Ethereum’s Initial Coin Offering (ICO) in 2014, recently deposited 1,069 ETH, worth approximately $3.56 million, with Kraken.
Traditionally, deposits on exchanges are seen as a sign of intent to sell, potentially putting downward pressure on the price of ETH.
This whale’s activity is especially notable for their participation in the Ethereum ICO. In 2014, they acquired 12,566 ETH at a paltry $0.30 per token. The recent transfer represents only a fraction of their holdings, but the sale price – over $3,300 per ETH – represents a huge profit for the early investor.
A #Ethereum #ICO participant returned after 1.12 years to deposit 1,069 $ETH ($3.56 million). #Kraken for $3,329 3 hours ago.
The whale received 12,566 $ETH bee #Ethereum Genesis in July 2015, at an ICO price of ~$0.31,
And then divided the $ETH divided over 12 wallets in 2017, of which… pic.twitter.com/Lid1hItGik
— Spot On Chain (@spotonchain) April 6, 2024
Ethereum market shows signs of accumulation
While the whale’s movement could indicate a possible sell-off, on-chain data shows a broader trend that could offset its impact. According to IntoTheBlock, a blockchain analytics company, there was a significant outflow of ETH from cryptocurrency exchanges, totaling as much as $4 billion.
This move suggests that many investors are accumulating ETH and possibly anticipating future price increases.
Ether market cap currently at $409 billion. Chart: TradingView.com
Dencun Upgrade Boosts Ethereum Network Activity
The news comes on the heels of Ethereum’s success Dencun upgradeimplemented in March 2024. The upgrade was intended to address the network’s scalability issues, specifically focusing on high transaction fees and slow processing times.
Early signs appear positive: IntoTheBlock reports an increase in activity on key optimistic rollups (Layer 2 scale solutions) after the upgrade.
Weekly transaction volume peaked at 32 million, indicating increased network usage. Although gas prices have increased recently, they were initially significantly lower for many Layer 2 solutions after the upgrade.
Market uncertainty persists
The combined effect of the whale sale, the broader accumulation trend, and the impact of the Dencun upgrade on network activity make it difficult to predict the short-term direction of the Ethereum market.
While the whale’s selling could trigger a price decline, the broader accumulation trend suggests underlying bullish sentiment. The Dencun upgrade’s success in reducing transaction costs and increasing network usage could further boost investor confidence.
Featured image from Pexels, chart from TradingView
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