When it comes to the volatile world of cryptocurrency, there
are several influential forces with the power to shape this space and impact
their future performances, at least to a considerable level. Major investors
like banks, hedge funds, giant institutions, and other players in the financial
system have the most power to decide the short-term fate of a cryptocurrency,
so it's no wonder that Ethereum, the second-largest digital coin by market
capitalization, is also partially controlled by them. Besides these major
elements, other factors that influence the price of Ethereum are market
sentiments, regulatory developments, political events, and so on, all of which
intertwine to determine the trajectory of the asset consequentially. By
understanding market movements and keeping an eye on whale activity, an
individual can make better decisions on when it's time to use their Binance account to
place an order for Ethereum.
One of the most impactful actors acting like the puppet
masters of digital coins are the cryptocurrency whales. In the hierarchy of the
cryptocurrency animals, they take the leading role based on the amount of
cryptocurrency they possess. With such impressive amounts of cryptocurrency,
it's no wonder the trends they dictate make the headlines and give valuable
insight into how the respective asset will perform further.
Recent market trend analysis from IntoTheBlock, an
intelligence company that analyses the current state of the crypto market,
shows that whales increased their activity in Ethereum, attracting huge amounts
of the asset in their wallets. They have doubled their Ethereum supplies over
the last few days, witnessing a transaction growth of 1,110 from the second to
the fourth of July. The Ethereum funds acquired by whales account for nearly
$20 billion, with whales transferring approximately $20 billion in a 7-day
period. As such, the latest trends in whale transactions can only suggest that
the sentiment market is improving, depicting a bright scenario after a period
that has been generally harsh on the asset and the rest of cryptocurrencies.
So, are whales' moves such significant indicators of
Ethereum's performance, and does the increase in their activity disclose
anything valuable? Should you care about it or sit on the fence until there are
more signs of market rehabilitation?
What exactly are crypto whales?
To better understand where Ethereum is going, grasping the
term "whale" is important, especially when there are other terms like
octopus, dolphins, and sharks that may complicate the puzzle. Cryptocurrency
whales, or more simply "whales," are the second category of investors
regarding cryptocurrency ownership. The largest cryptocurrency investors are
known under the status of "humpbacks" and accommodate a total of 5000
crypto coins. Whales follow after them and must acquire over 1.000 coins to
enjoy their statute.
Achieving the title of "whale" is a subjective
undertaking, with some considering that a large amount of cryptocurrency is
enough for an entity to be classified in this category. On the other hand,
whales remain the most prominent players swaying coins' prices.
How do crypto whales influence the Ethereum price?
As mentioned above, crypto whales are among the entities
with the most considerable power of influence over the price of Ethereum or any
other cryptocurrency, as well as the arising trends. Whether the shock waves
are felt for a shorter or longer period depends on what these major owners plan
to do with the assets.
Whales may get huge amounts of Ethereum to cash in on the
price movements, moving the asset around to sell it further. However, at the same
time, they may adopt a long-term outlook and react to the spreading popularity
of the token. As the most recent studies show, cryptocurrency is getting
increasingly more talked about, with almost 92% of people having heard of it at
least once in their lifetime.
Ethereum's recent price improvements have attracted a lot of attention
Ethereum has been doing much better lately than at the
beginning of the year, showing a growth of around $700 from the middle of
January until the moment of writing. While it experienced some downturns due to
the SEC case and saw its price fall to around $1,600, it quickly recovered and
grew over $1,900. Some pundits believe the $2000 price may be just around the
corner, while others have mixed feelings about its future performance. What has
fueled its price surges was the recent appearance of new institutional
investors on the cryptocurrency scene and the latest positive developments.
Similar news only led to a renewed interest in the cryptocurrency space, which
is helpful for Ethereum and the asset's owners.
Besides the recent value upgrades, liquid staking on
Ethereum has also gained popularity. Months after the Shapella upgrade was
launched, almost 20% of the Ethereum supply is now locked in staking contracts.
The past two months have seen an abrupt increase of 5%.
The massive spikes in whale activity are not unusual
No one can deny that the recent upward trend isn't
impressive in itself. However, great transaction increases are not out of the
norm for such a well-implemented cryptocurrency like Ethereum. In fact, they
are common in times of price surges in cryptocurrency, when these entities pour
huge amounts into an asset that starts behaving well to boost the size of their
holdings. Whale transactions soared past the $3,000 mark at the end of June.
A similar explosion in whale activity occurred at the
beginning of the year, when the price spiked above $1.200.
To take into consideration
It's important to note something in this regard. You should
treat the whale movements with common precaution, as two possible scenarios may
be true. A boost in whale activity can signal better market sentiment and
growing demand. On the other hand, it can also be a result of major
institutions' adding huge amounts of Ethereum to their wallets to profit from
short-term price fluctuations. This is an important difference, as it can help
determine whether you're into a long-term or short-term investment strategy.
As you can see, the future looks bright for Ethereum, as
recent growing whale activity reveals. The recent movements spiked market
interest and show that there's building confidence among the major investors,
fueling speculation among pundits and analysts about the asset's performance in
the second half of the year.
