Ethereum Whale Activity Raises Red Flags As Dominance Declines

Ethereum, the second-largest cryptocurrency by market capitalization, has seen its dominance decline slightly, dropping from 16.8% to 15.2% over the past two years.

Despite this modest decrease, Ethereum has managed to maintain relative stability in the ever-fluctuating crypto market.

#Bitcoin Dominance has surged from 38% in Nov 2022 to a notable 56% today. Meanwhile, #Ethereum, the second-largest asset, saw its dominance decline by 1.5%, remaining relatively stable over the past two years.

In contrast, Stablecoins and the broader Altcoin sector experienced… pic.twitter.com/Aa23pN2aRa

— glassnode (@glassnode) August 21, 2024

However, recent whale activity is drawing significant attention, particularly as it coincides with steep price drops.

Over the past month, a giant Ethereum whale has been making substantial deposits to centralized exchanges (CEXs) just before significant declines in ETH’s price.

Notably, the whale moved 25,000 ETH, worth $73.9 million, to Kraken on two separate occasions—each time preceding a sharp drop in price.

On August 20th, the whale transferred 15,000 ETH, valued at $39.7 million, to Kraken when the price was at $2,645. This move was quickly followed by a 2.5% drop in Ethereum’s price. Similarly, on July 25th, the same whale moved 10,000 ETH, valued at $34.2 million, when Ethereum was trading at $3,420, which preceded a more substantial 7.6% decline.

This giant whale keeps depositing $ETH to CEX ahead of steep price drops!

In the past month, the whale moved 25K $ETH ($73.9M) to #Kraken on 2 occasions, both times before a significant price drop:

• 15K $ETH ($39.7M) at $2,645 11 hours ago, before a 2.5% drop.
• 10K $ETH… https://t.co/jYDC4wxKWB pic.twitter.com/sAAL2SRjUj

— Spot On Chain (@spotonchain) August 21, 2024

Despite these transactions, the whale still holds a substantial amount of Ethereum—41,639 ETH, valued at approximately $107 million. Remarkably, the whale’s total estimated profit from these trades stands at $131 million, reflecting an impressive gain of 85.9%.

This activity comes at a time when Ethereum spot ETFs are experiencing mixed flows. On August 20th, the total net outflow of Ethereum spot ETFs was $6.49 million. Grayscale’s ETHE ETF saw a significant outflow of $36.99 million, while BlackRock’s ETHA ETF recorded an inflow of $26.77 million, and Bitwise’s ETHW ETF had an inflow of $3.73 million.

On August 20, the total net outflow of Ethereum spot ETFs was $6.4867 million. Grayscale ETF ETHE had an outflow of $36.9906 million, BlackRock ETF ETHA had an inflow of $26.7749 million, and Bitwise ETF ETHW had an inflow of $3.7289 million. https://t.co/Tvs2oCSxTg

— Wu Blockchain (@WuBlockchain) August 21, 2024

The consistent timing of this whale’s transactions ahead of price drops raises questions about market manipulation and whether other traders should be wary of similar moves. As Ethereum continues to navigate these turbulent waters, the market will be closely watching the actions of large holders like this whale, whose moves could signal future price volatility.

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

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

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