The 23rd of July marks a historic day for the Ethereum (ETH) community as the U.S. Securities and Exchange Commission (SEC) has approved S1 Ethereum ETFs, set to commence trading soon. This approval has generated significant enthusiasm, with experts predicting that billions of dollars could flow into Ethereum ETFs over the next year.
The approval of Bitcoin (BTC) ETFs demonstrated strong market demand for cryptocurrency ETFs, and similar expectations hold for ETH. However, caution is warranted as extreme market excitement can often lead to whale manipulation.
Are Ethereum ETFs a “sell the news” event?
Historically, major market events, such as the approval of Bitcoin ETFs, have provided opportunities for whales to manipulate prices. Could Ethereum face a similar scenario following its ETF approval?
Recent data from Lookonchain indicated that a whale moved 8,762 ETH to Binance following the announcement of nine Ethereum ETFs being approved, valued at over $30 million. This move suggests that whales might be preparing for short-term exits.
On-chain data from IntoTheBlock revealed an increase in large transactions (addresses holding over $100,000 in value), spiking from 3,820 to over 5,400 transactions around the time of the ETF news. This indicates heightened whale activity in the market.
AMBCrypto’s analysis showed an uptick in Ethereum exchange reserves on CryptoQuant, suggesting potential sell pressure. However, exchange inflows have slowed, indicating that ETH whales holding the asset in private wallets may not be selling yet.
Are ETH whales cashing out?
While the data does not provide concrete evidence of immediate whale-induced sell pressure, the increase in exchange reserves could signal potential sell-offs. Conversely, the slowdown in exchange inflows suggests that many ETH holders are not yet selling.
In conclusion, it is still early days following the ETF approval announcement. The market, including whales, may take some time to react fully. Historical trends suggest the possibility of sell pressure and price dips, but market conditions could lead to different outcomes this time.
As the Ethereum community navigates this significant development, investors should stay vigilant and monitor whale activity and market trends closely.