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.