On-chain analytics point to an accumulation phase for Ethereum


The on-chain data suggests that large Ethereum holders are taking advantage of last month’s correction to accumulate more coins while retail demand for ETH does not appear to be slowing down.

It’s no secret that large holders (also known as whales) tend to be the ones that affect an asset’s price movement the most. In traditional finance, it is becoming impossible to transparently monitor the behavior of these major carriers: what are their balances? Are they actively buying or selling? When do they do it? For crypto-assets, the mining and monitoring of this data is transparent since all data is recorded on-chain and only needs to be processed.

After big market moves, it’s time to look at the behavior of these entities and their positioning for the future. After the recent crypto market plunge, we took a look at what their whales are doing. In this specific case, for ETH, the group of investors who hold between 10,000 and 100,000 ETH in their wallets are those who control the majority of ETH with almost a quarter of the total ETH supply. This group of investors has a big influence on the price action of the asset, as can be seen in the chart below, their ETH balance sheet continues to grow. They have accumulated considerably, growing their total balance from 28.3 million ETH in March to 29.0 million ETH nowadays, almost 700,000 ETH more, which equals 1.38 billion of dollars :

Balance indicator by holdings as of May 24 according to IntoTheBlock

The divergence on the indicator is very clear, and it is a sign that this mass of investors might be looking to accumulate at these prices as they expect ETH to appreciate going forward. Do they view this market drop as an opportunity to buy at a discount and continue to accumulate?

Besides what the big whales do, the success of the Ethereum blockchain also relies on small investors deciding to use the myriad of applications on offer today, from decentralized finance to NFTs. A useful metric to gauge whether this interest is rising or falling is to measure the number of addresses with a modest balance of ETH, as an indicator of the retail sector. The 1-10 ETH range is a perfect group to measure this in, as this is what is generally a moderate balance that still allows users to interact with dApps and pay their gas fees more comfortably. As can be seen in the graph below, in addition to the market slowdown, addresses with ETH holdings between this range continue to grow significantly, from 1.14 million addresses to 1.19 million addresses in just a month and a half:

Chart

Addresses by Holding indicator as of May 24 according to IntoTheBlock.

On-chain data can be a powerful tool for uncovering potential support and resistance levels that could act as a pivot point for ETH price action. These levels can be extracted by taking into account the average cost of ETH for each address and grouping them by price brackets. These price ranges that display a greater amount of portfolios could potentially indicate a price level where many investors could move from a profitable to an unprofitable situation, and therefore more likely to act by buying or selling. their ETH and affecting price action. This calculation is what is shown in the indicator below, the In/Out of the Money Around Price indicator:

Chart

In/Out of the Money Around Price indicator as of May 24 according to IntoTheBlock.

As always, we take into account that each portfolio may be close to an investor, although we assume that there are a minority of cases where an entity may control multiple addresses. As can be seen from the chart, there is a large portion of addresses (+2 million addresses) that bought between the price levels of $1970 and $2087, so if this price resistance was broken, the price could potentially reach new highs if conditions are positive. .

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