It is difficult for Ethereum to keep its richest investors as its native token, Ether (ETH), suggests further losses soon.
Ethereum Whales Holding 1,000 ETH Plunged to the Lowest
According to a Blockchain data analytics service report on December 27, Glassnode published that the number of addresses with at least 1,000 ETH has dropped to 6,292 this Monday, the lowest since April 2017. In January of this year, it was 7,239, which is the highest value so far this year.
On-chain analysts usually watch the distribution of ETH between addresses to help set the mood in retail and institutional settings. They consider wallets with more than 1,000 ETH (approx. 3.92 million US dollars in exchange rates) as “whales”, mainly because they can influence medium-term market trends through a large number of sell and/or buy orders.
But as the numbers of these so-called whales are declining, it reflects the ongoing sales trend among the richest Ethereum wallet owners. For example, the number of Ethereum addresses with at least 10,000 ETH (or about $39.2 million) has also dropped from 1,208 in June to 1,156 at the time of writing, a decrease of nearly 4.5%.
Over the year to date, however, the number has risen from 1,065 to 1,156, and at the same time, the cost of buying 1 ETH has increased by almost 450% over the same period.
Small Investors Are Accumulating ETH
Unlike whales, wallets with a small amount of ETH were at the forefront of ETH price hikes in 2021.
For example, data from Glassnode shows that the number of Ethereum addresses with non-zero ETH credit hit a record high of more than 71.23 million on Monday. These include wallets with at least 0.01 ETH (about $40), the number of which has increased from 10.66 million to 20.31 million earlier this year.
At the same time, addresses with at least 0.1 ETH (around $400) rose from 3.62 million on January 1, 2021, to 6.44 million this Monday. This has nearly doubled, suggesting growing retail interest in the world’s second-largest cryptocurrency.
ETH Forming a Bullish Reversal
The most recent decline in Ether Whale came when Ether closed well above its $4,000 psychological resistance level.
On Tuesday, ETH/USD fell more than 3.27% to an intraday low of $3,880. Its decline is part of a broader correction that began as resistance on December 23 after the downward sloping trendline on the Ethereum test
The image below shows that the trendline is part of the descending channel and looks like a “falling wedge”.
ETH/USD Daily Chart. Source: TradingView
In detail, the descending wedge is a technical bullish reversal pattern that occurs after the price trend goes down in a trading range with two convergent trend lines. The tool will eventually break the structure’s top trendline before or after it reaches the vertex (where the two trendlines meet).
The profit target in the rising wedge scenario is usually achieved by adding the maximum distance between the top and bottom trend lines of the structure to the breakout point. This puts the price of ETH in the $4,200-5,000 range, depending on its breakthrough level.
Even so, the price of Ether still has enough room to drop to $3,200 in the worst-case scenario. This level is the meeting point of the wedge-shaped trend line.