According to recent data, the Ethereum market is facing significant challenges in present times. Data from Glassnode, an on-chain analytics firm suggests a substantial decline in holdings by major investors.
On Wednesday, the firm shared recent current stats related to the holdings division of the second largest crypto by market capitalization. Data suggests that the number of Ethereum addresses holding 1,000+ coins i.e. the whales has reached a 10-month low of 6,268. This low was previously observed in November 2022 with a slightly higher count of 6,270.
Notably, this declining value of whale holdings is typically a bearish sign, suggesting that large-scale investors may be losing faith in Ethereum’s short-term prospects. Analysts suggest that such a shift in the sentiment of significant investors often has a noticeable impact on the market.
The whales have a significant place because their transactions are sizable enough to influence Ethereum’s price. Simultaneously, in recent times, Ethereum is nearing the 50-day Exponential Moving Average (EMA).
This technical level could become a potential consolidation point for the second largest cryptocurrency. However, analysts suggest that the decreasing trade volume potentially affects Ethereum’s price stability. Such movements among whale investors could be attributed to a range of factors.
Interestingly, while the number of Ethereum whale addresses have declined, the holdings have continued to accelerate at a significant speed. This implies that while some are choosing to sell their asset, there is also a portion of investors who are positive about the asset. Another aspect to be considered is that while some whales might be taking profits following Ethereum’s previous rallies, others might be reallocating their assets in response to market trends.
Analysts also say that it is also possible that concerns about Ethereum’s scalability and high transaction fees are causing some whales to reduce their holdings. It is important to mention that Ethereum is on the verge of receiving a major upgrade aiming to improve scalability, security and sustainability.
This upgrade might impact investor sentiment as the potential risks and benefits of the transition become clearer. The diminished holdings of Ethereum by whales might seem concerning for some investors, as it can indicate a loss of confidence or signal a market downturn. However, Ethereum’s ownership is not the only thing to notice at the moment.
According to data, a significant amount of Ethereum, estimated around 143,830 ETH ($275 million), has been burned over the past month. The asset has started to deflate, with a supply growth rate that is decreasing by 1.46% annually.
The data trackers have anticipated that this year, the network will burn about 2,441,000 ETH ($4.5 billion). In comparison, Ethereum would have had a 2% supply growth rate if it had continued to run on a Proof of Work mechanism. As of writing, Ethereum is trading at $1,8651.71, a 1.86% decline over the past day and about a 0.27% decline over the month.