The approval of Spot Ethereum ETFs by the U.S. Securities and Exchange Commission (SEC) on July 23rd marks a significant milestone for the Ethereum (ETH) community. This development is expected to attract billions of dollars in investments over the next year, reflecting the market’s enthusiasm.
Drawing from the Bitcoin (BTC) ETF experience, which saw substantial demand, similar expectations are set for Ethereum. However, historical trends suggest caution, as market excitement often leads to whale manipulation.
Could Ethereum ETFs Trigger a Sell-Off?
Past events have shown that extreme market excitement can be a playground for whales. For instance, Bitcoin experienced significant whale activity following its ETF approvals. A similar scenario might unfold for Ethereum.
Lookonchain reported that a whale moved 8,762 ETH (valued at over $30 million) to Binance following the ETF approval news. This move suggests that whales might be preparing to secure exit liquidity in the short term.
Whale Activity and Market Indicators
On-chain data reveals a spike in large transactions (addresses holding over $100,000 in value) from 3,820 to over 5,400 transactions since July 21st, coinciding with the ETF news. This spike indicates increased whale activity.
CryptoQuant’s data shows a slight uptick in exchange reserves over the past three days, although exchange inflows have slowed. This suggests that while some ETH might be moving to exchanges, whales holding ETH in private wallets may not be selling yet.
Are ETH Whales Preparing to Cash Out?
Current metrics do not provide concrete evidence of whale-induced sell pressure. However, the uptick in exchange reserves could signal potential sell pressure from addresses holding ETH on exchanges. Conversely, the slowdown in exchange inflows indicates that whales might still be holding onto their ETH.
Conclusion
It’s still early days following the ETF approval announcement, and the market may take time to react. Historical patterns suggest that long-liquidation-induced sell pressure could trigger a downside for ETH in the coming days. However, this time might be different, especially if overall crypto market conditions are favorable.
