Key Takeaways:
- Accoding to on-chain metrics, whales of the leading smart contract platform Ethereum are collecting.
- Ethereum’s total value locked (TVL) took a 23% hit, but experts believe ‘Ethereum killers’ are worse off.
- The Network’s native token Ether (ETH) dropped 54% from its all-time high of $4,868, and lost lost 34% in the previous week alone.
YEREVAN (CoinChapter.com) – Ethereum’s in-house token Ether (ETH) bled over 54% since establishing its all-time high on Nov 10. The bearish wave led by Bitcoin (BTC) hit all the cryptocurrencies in the top 100, making bullish prognosis difficult.
ETH Whales accumulating?
However, according to on-chain analytical platform Santiment, Ethereum whales are on the move. In detail, whales are addresses that possess large amounts of coins. It often results in their ability to sway the market in a particular direction. Typically, whale accumulation signals an upcoming recovery, as they ‘buy the dip.’
According to the platform’s report, the number of whales away from exchanges rose drastically in the previous week, as the ETH value declined. Out-of-exchange accumulation is a sign that the whales have no intention to sell their ETH and prefer to store it away.
Also read: How Ethereum (ETH) outperformed Bitcoin (BTC) in 2021.
The report also stated that Ethereum addresses on exchanges have declined to 3.52 million, the lowest since August 2015. Once whales abandon ship, they can trigger a massive sell-off wave. However, a closer look at the graph above revealed that the top 10 exchange whales also declined during the price surge in early 2021.
The decline in large exchange addresses could signify their desire to HODL rather than exchange their ETH, which complies with the rise in non-exchange addresses. If that’s the case, ETH could recover soon, possibly bottoming out under $2,000 for the first time in over seven months.
What about Ethereum killers?
In 2021 traders witnessed a significant rise in Ethereum competition, i.e., layer-1 solutions, featuring smart contract functionality. Platforms like Solana (SOL), Avalanche (AVAX) rose to prominence, challenging Ethereum’s notoriously high fees and frequent congestions.
However, some experts believe that the only real ” Ethereum killer” might be ETH 2.0. In hindsight, Ethereum put the controversial upgrade on the roadmap years ago. However, the path to get there has been slower than expected.
Also read: Solana faces network instability woes as SOL paints a bearish pattern.
The upgrade will take Ethereum from a proof-of-work consensus mechanism to a proof-of-stake, drastically reducing energy consumption. It will also increase the blockchain’s throughput and reduce the fees. As the ecosystem’s scalability improves, dapp users might choose Ethereum 2.0 over the competition, says analytics from Coinbase.
We do think that the culmination of [layer 2] scaling solutions combined with upgrades like the Beacon Chain merge and sharding could limit progress for alternative [layer 1s] in their current form.
read the report.
However, the much-anticipated transition is not yet here, while Ethereum’s price plunged close to $2,000.
ETH bearish weekly chart
The second-largest cryptocurrency traded at $2,194 on Jan 24. According to a bearish Rising Wedge set up on the Ethereum weekly chart, the digital asset hinted at more losses in the upcoming weeks. The Wedge features two converging trendlines, both with a positive slope. As ETH broke the setup’s support, it is likely to plunge further.
Additionally, due to the latest plunge, Ether lost another significant support that assisted the digital asset since early 2020.
Also read: New Ethereum killer born? Startup aims to solve higher gas fees problem using dollar.
Despite the bearish technicals, off-exchange Ethereum whales are buying the dip. The accumulation could result in an uptrend. However, the smart contract platform remains dependent on the overall market climate, which doesn’t look promising for the next few weeks.
