- Ethereum ETFs have seen the light of day, but if history repeats itself, whales might put bulls in a chokehold.
- Market indicators revealed the current state of ETH’s demand, including exchange flows.
The 23rd of July is a historical day for the Ethereum [ETH] community. The U.S. Securities and Exchange Commission (SEC) has given S1 Ethereum ETFs the greenlight, and they are set to commence trading.
The market has been enthusiastic about Ethereum ETFs, with experts expecting billions of dollars to flow into the ETF in the next 12 months.
Bitcoin [BTC] ETFs have proven that there is heavy demand for the cryptocurrency, and the same should hold true for ETH. Nevertheless, history warrants caution before you ape into ETH.
Are Ethereum ETFs a sell the news event?
Extreme market excitement has historically provided a playground for whales to manipulate the market. Such a scenario played out when Bitcoin right after Bitcoin’s ETFs approvals were announced.
Could the same thing turn out true for ETH following the spot ETFs approvals?
According to Lookonchain, one whale reportedly moved 8,762 ETH to Binance after it was announced that nine Ethereum ETFs were approved at an amount valued over $30 million.
This suggested that the whales might be preparing to secure some exit liquidity and exit in the short-term.
We explored on-chain data to determine the level of whale participation currently in the market. IntoTheBlock’s number of large transaction (addresses holding over $100,000 in value) revealed a spike.
They bounced from 3,820 transactions to over 5400 transactions from the 21st of July after previously indicating a slight slowdown since mid-July.
Source: IntoTheBlock
The spike above occurred around the same time that the Ethereum ETFs news have been making headlines. So, AMBCrypto decided to confirm whether the whale activity reflected sell pressure.
The exchange reserve on CryptoQuant revealed that there was a bit of an uptick in exchange reserves in the last three days. However, exchange inflows slowed down considerably during the same period.
Source: CryptoQuant
Are ETH whales cashing out?
The metrics did not offer any concrete evidence of whale-induced sell pressure, at least in the last three days. However, ETH’s exchange reserves registered an uptick.
Potentially signaling ETH sell pressure from addresses holding the cryptocurrency on exchanges.
On the other hand, we observed an exchange inflows slowdown. ETH whales holding the asset in their private wallet may not be selling yet.
Read Ethereum’s [ETH] Price Prediction 2024-25
In conclusion, it is still early on after the announcement. Whales and the market in general may still have time to react.
History dictates that a wave of long-liquidations induced sell pressure may trigger some ETH downside in the coming days. Nevertheless, things might be different this time, especially if the overall crypto market conditions align.