Ethereum Whale Selloff Continues As Supply Share Drops Under 75%

Overview

Recent on-chain data indicates a significant selloff among Ethereum whales, with wallets holding over 1,000 ETH reducing their holdings by 1.5% over the past eleven weeks. This trend marks a noteworthy shift in the distribution of Ethereum’s supply and has implications for the broader crypto market.

Ethereum Whale Activity

According to on-chain analytics firm Santiment, Ethereum addresses that contain more than 1,000 ETH have been engaged in net selling since Christmas. This has led to a decrease in their share of the total circulating ETH supply, dropping it below 75%, the lowest level observed in seven months. The selloff from these large holders, often referred to as sharks and whales, is significant because these entities are considered key players in the market due to the substantial size of their holdings.

The “Supply Distribution” metric, which tracks the percentage of total ETH supply held by various wallet groups, highlights this trend. While whales have been distributing their tokens, smaller Ethereum investors—those holding less than 1 ETH—have increased their share of the supply, now exceeding 2.3%. This group has reached its highest level ever, suggesting a growing interest among retail investors.

Mid-tier wallets, categorized as holding between 1 and 1,000 ETH, have also seen an uptick in their combined supply, surpassing 23% for the first time since July. The rise in smaller and mid-tier wallets may be linked to staking activities, indicating that while large holders are selling, smaller investors are accumulating.

The ongoing selloff among whales coincides with a decline in Ethereum’s price, which has plummeted nearly 14% over the past week. This bearish price action raises concerns about the potential for continued downward momentum if the current distribution trend persists.

From author

The dynamic within Ethereum’s supply distribution provides insights into market sentiment. While whales are offloading assets, smaller investors seem to be more optimistic, potentially viewing this as an opportunity to accumulate. This divergence in behavior could signal a shift in market dynamics, particularly if whales continue to sell while retail investors hold or increase their positions.

Impact on the crypto market

• The reduction in supply held by Ethereum whales could lead to increased volatility in Ethereum’s price as large sell orders may impact market liquidity.
• The rise in holdings among smaller investors may indicate a shift in market sentiment, suggesting that retail confidence in Ethereum remains strong despite the selloff by larger entities.
• The ongoing selling by whales could create a bearish outlook for Ethereum prices if the trend continues, prompting further caution among investors.
• The contrasting behavior of large holders versus retail investors may lead to interesting market dynamics, potentially influencing future price movements and trading strategies.
• If the current trend continues, it may prompt discussions about the stability of Ethereum and its ability to recover from recent price declines.