$254M Buying Spree Defies Market Trends

TLDR

Ethereum whales bought $254m worth of ETH despite rising exchange inflows
Large holder inflow nearly doubled over the past week
Exchange net flows shifted from outflow to inflow, indicating short-term profit-taking
ETH price surpassed $2,600 after two weeks of bearish consolidation
U.S.-based spot ETH ETFs performing poorly compared to Bitcoin ETFs

Ethereum, the leading altcoin, has experienced significant whale accumulation despite an increase in exchange inflows, presenting a complex market scenario.

According to data from IntoTheBlock, Ethereum large holder inflow nearly doubled over the past week, with a net inflow of 97,220 ETH (approximately $254 million at current prices) recorded on October 15, 2024.

This surge in whale activity coincides with Ethereum’s price movement above the $2,600 mark, following a two-week period of bearish consolidation.

The cryptocurrency’s price rose from the $2,400 range, briefly touching a local high of $2,685 before experiencing a sharp correction.

However, the market also witnessed a shift in exchange flows. Ethereum’s exchange net flows transitioned from a net outflow of 5,700 ETH on October 13 to a net inflow of 15,000 ETH on October 15.

This change suggests that some investors are aiming for short-term profits, taking advantage of the recent price increase.

The conflicting signals became evident as a major profit-taking momentum occurred between 14:00 and 15:00 UTC on Tuesday.

During this hour, Ethereum’s price quickly dropped from its local high to $2,540, erasing approximately $16.6 billion from its market capitalization.

Despite this correction, Ethereum has managed to maintain its position above the $2,600 mark. As of the latest data, the cryptocurrency boasts a market cap of $313 billion and a daily trading volume of $22 billion.

While whale accumulation typically signals confidence in an asset’s long-term prospects, the increased exchange inflows present a contrasting narrative.

This dichotomy highlights the complex nature of cryptocurrency markets, where large holders and retail investors may have differing strategies and outlooks.

Adding to the mixed market signals, U.S.-based spot Ethereum exchange-traded funds (ETFs) have been underperforming.

These investment products recorded a net outflow of $12.7 million on October 15, contrasting sharply with spot Bitcoin ETFs, which saw a net inflow of $371 million on the same day.

The lackluster performance of Ethereum ETFs extends beyond the United States. In Australia, Monochrome Asset Management launched the country’s first spot ETH ETF on Tuesday.

However, the fund has only accumulated $272,908 in total net assets so far, indicating a slow start for institutional Ethereum investments in the region.

Ethereum’s current market position reflects a balance between bullish and bearish factors. The substantial whale accumulation suggests strong confidence from large holders, potentially indicating positive long-term sentiment.

However, the increase in exchange inflows and the underperformance of ETH ETFs present challenges to sustained price growth.