Understanding Ethereum Whales' Distribution Activity
Recent on-Chain Data analysis reveals a concerning trend regarding Ethereum whales' distribution activity over the last six months. This continuous distribution pattern among large Ethereum holders may not bode well for the future of ETH.
Ethereum Accumulation Trend Score Indicates Red Flag
According to analyst James Van Straten, the Accumulation Trend Score for Ethereum has been signaling a less-than-ideal scenario for the Cryptocurrency. This score, provided by Glassnode, offers insights into whether investors are accumulating or not.
The Accumulation Trend Score considers not only the net balance changes within investor Wallets but also factors in the entity sizes. Larger entities carry more weight in this indicator. A score close to 1 indicates strong accumulation by large investors or a significant number of small holders buying. Conversely, a score nearing 0 suggests either net distribution within the network or a lack of accumulation.
In the current context, the focus is on the Accumulation Trend Score for individual cohorts based on wallet balances. The latest data reveals a concerning trend for Ethereum across various cohorts.
Ethereum Cohorts Accumulation Trend Analysis
- Early in the year, the Ethereum Accumulation Trend Score displayed a blue hue, indicating some degree of accumulation among investors
- Following Bitcoin's all-time high in March, aggressive selling among investors turned the Accumulation Trend Score a deep red
- Although selling has somewhat stabilized in recent months, the metric continues to lean towards red
- Notably, the larger cohorts, including the 100 to 1,000 BTC, 1,000 to 10,000 BTC, and 10,000+ BTC groups, are still in a phase of distribution
Referred to as sharks, whales, and mega whales respectively, these significant investors' consistent selling behavior over the past six months raises concerns for Ethereum's future performance. Until these cohorts shift back to accumulation mode, Ethereum may struggle to see significant recovery.
Current Ethereum Price Movement
As of the latest update, Ethereum's price hovers around $2,400, reflecting a more than 7% decline over the past week.
The recent price movement indicates sideways trading activity | Source: ETHUSDT on TradingView
It is crucial for Ethereum investors and enthusiasts to keep an eye on the ongoing distribution trend among whales and its potential impact on the Cryptocurrency's price trajectory. Stay informed and stay updated with the latest developments in the Ethereum ecosystem.
Featured image from Dall-E, Glassnode.com, chart from TradingView.com
