As Ethereum nears the $4,000 mark, investors are closely monitoring the movements of crypto "whales." These holders of significant ETH amounts appear to be adopting a bullish strategy, hinting at a potential supply shortage in the market.
Recent activity from the largest Ethereum holders is intriguing market observers. These “whales,” who control substantial liquidity, have significant impact on market direction through their massive transactions.
For example, the whale Aguila Trade recently closed an ETH short position after suffering more than $8 million in losses, only to open a new long position. According to HyperDash, this new position is valued at over $128 million, but has already been partially liquidated following ETH’s correction to $3,684 currently.
Similarly, LookonChain reported that another whale withdrew 13,244 ETH ($49.52 million) from the OKX exchange platform to transfer to private wallets. This type of movement often signals a bullish long-term outlook, as investors prefer to hold their assets rather than sell them in the short term.
Data shows significant flows in both the spot market and on-chain for Ethereum. According to CoinGlass information on net exchange flows, investors have withstood two consecutive days of massive selling. They have accumulated over $70 million worth of ETH transferred to private wallets, highlighting a broader long-term bullish sentiment.
Inflows from other blockchain ecosystems to Ethereum, reported by Artemis, also reach $4 million. This indicates capital rotation toward ETH, with investors likely anticipating a strong price increase.
The amount of ETH held on exchange platforms has significantly decreased, with reserves following a downward trend. With only 16,000 addresses currently depositing ETH, we’re seeing reduced selling activity, particularly after ETH’s 54% increase over the past four weeks.
This continued decrease in ETH available on exchanges could trigger a supply shortage, potentially fueling another price surge. If this trend continues, a significant increase in Ethereum’s price could be imminent.
With current bullish signals, including declining exchange reserves and liquidity inflows, Ethereum could soon break through the $4,000 threshold. In the short term, ETH appears perfectly positioned for a rebound to $4,000 in the coming days or next week.
Indeed, its RSI on the 1H timeframe is approaching oversold territory, similar to July 15th before its 30% rise in just a few days. Additionally, it sits at an interesting demand zone.
Charles Ledoux is a Bitcoin and blockchain technology specialist. A graduate of the Crypto Academy, he has been a Bitcoin miner for over a year. He has written numerous masterclasses to educate newcomers to the industry and has authored over 2,000 articles on cryptocurrency. Now, he aims to share his passion for crypto through his articles for InvestX.
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