What role have Ethereum whales played in the recent correction?
April could be quite a long month for Ethereum. The asset is up more than 40% in the space of a month as the world's second-largest cryptocurrency hits its latest ATH.
However, a price correction has quickly entered the market over the past 24 hours, and Ethereum appears to have lost almost 10% of its value so far, now trading near $2,200.
While most investors are confident in Ethereum's long-term prospects, the token appears to be very vulnerable to Bitcoin's price, however,It is also important to examine whether other factors inherent to the Ethereum ecosystem contributed to the latest price correction.
Over the course of the past day, Ethereum’s decline has been quite pronounced, with the asset trading at a high of $2,661 in the first two days before falling below the $2,264 support level, which turned into a strong resistance.
Data provided by Santiment highlights Ethereum’s strong performance since breaking its previous ATH,In this case, one factor driving the price to stand out is the performance of Ethereum “whales.”
We all know that large accounts have always been crucial in the crypto ecosystem, and in the case of Ethereum, it is no different. As ETH surged from around $1,500 at the end of March to record highs in April, large accounts have been pulling assets off exchanges and into offline private wallets in large numbers.
Santiment noted that within this timeline,Addresses with more than 10k ETH are very active and likely contributed significantly to the leading altcoin’s bullish momentum over the month.
Interestingly, over the past few days, Glassnode has also reported that Ethereum’s USD on-chain transaction fees spiked a few days ago to the second-highest level in Bitcoin’s history, with on-chain fees reaching $47.3 million per day, approaching The peak of $48 million was reached on February 21.
While whales can dictate cryptocurrency price action and uptrends from time to time, this also results in assets being concentrated in fewer hands.
While cryptocurrencies like ETH are not necessarily problematic in terms of adoption, the concentration of tokens in whale accounts can also lead to a spike in the volatility of the currency.Of course, volatility can also help crypto assets move upwards, but ETH’s correlation with BTC is a limiting factor.
ETH continues to maintain a high correlation with major crypto assets. As seen over the past 24 hours, this allowed ETH to influence Bitcoin’s movements in the event of a price correction,If a large account is under market pressure, triggering panic selling, it can also amplify the price drop.
However, ETH’s fundamentals seem to fully support its price in the long-term. According to the data provided by Glassnode, the total value of Ethereum pledged by ETH 2.0 continued the upward trend in 2021 and reached another new high.
Despite these short-term price corrections, Ethereum still gained a lot of confidence from investors and was able to navigate the bear market with minimal losses.
Although this situation may continue,The original text comes from ambcrypto, compiled and organized by Blockchain Knight, the English copyright belongs to the original author, please contact the compiler for Chinese reprint.
The original text comes from ambcrypto, compiled and organized by Blockchain Knight, the English copyright belongs to the original author, please contact the compiler for Chinese reprint.
