Ethereum: A surge in whale stocks may not help ETH investors.  Here’s why…

Ethereum: A surge in whale stocks may not help ETH investors. Here’s why…

  • Ethereum whales are adding more ETH coins to their holdings
  • The current market outlook may make it difficult for whale accumulation to positively affect the price

During intraday trading on November 21, data from chain analysis Sentiment revealed a significant rise in Ethereum [ETH] whaling. ETH whales holding between $10.9 million to $1.09 billion ETH added 947,940 ETH, which was worth $1.03 billion at today’s price.

Read Ethereum’s [ETH] price forecast 2023-2024

Santiment noted that the addition represented the fifth “largest one-day addition in the past year.” In the last four cases, ETH’s price rose during the three days that followed.

At press time, ETH was changing hands at $1,100.34. The leading altcoin last traded at these levels in July.

Does ETH look well poised for a rally?

According to data from CoinMarketCap, ETH’s price has fallen by 2% in the last 24 hours. In the same period, trading volume fell by 14%. This created a price/trading volume divergence that is usually present in a bear market.

The divergence indicated buyer fatigue and low conviction among ETH holders, who may be unsure of any significant positive price upside in the short term. For the predicted rally to happen, conviction must increase, as the same will drive more demand into the market, pushing up the price of everything.

In addition to a price/trading volume gap that hindered the projected price rise, there was also a lack of new ETH demand. Per data from Santiment, since November 13th, the number of new addresses created daily on the ETH network fell by 28% at press time. As of 21 November, 77,405 new addresses were created on the ETH network.

Furthermore, the number of unique addresses trading ETH daily has since decreased by 41% in the last four days, data from Santiment revealed. At the time of writing, 58,039 addresses traded the leading alt.

Source: Sentiment

The outlook looks bearish in the short term

An assessment of ETH’s price performance on a daily chart revealed that sellers were in control of the market.

A look at its exponential moving average (EMA) position confirmed this. At the time of writing, the 20 EMA (blue) was below the 50 EMA (yellow) line. This showed that the ETH sale exceeded the accumulation.

This was further confirmed by the Directional Movement Index (DMI). Sellers’ strength (red) of 34.56 was solidly above buyers’ (green) of 8.52.

The asset’s relative strength index (RSI) came close to being oversold at press time. It was positioned in a downtrend at 33.61. The dynamic line (green) of Chaikin Money Flow (CMF) also rested below the center line to give a negative value of -0.17.

This showed that the buying pressure had fallen significantly at press time, and a positive turn in the conviction is required for this to change.

Source: TradingView

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