Ethereum whales buy at it: Will the ETH rally begin?

In the rapidly changing world of cryptocurrencies, it is often the comparison to direct competitors that determines the perception and evaluation of a blockchain network. Ethereum, the largest smart contract platform in the crypto market, has shown respectable growth of 77 percent this year. However, in light of the impressive price gains of Bitcoin at 131 percent and Solana at 376 percent, this growth seems almost modest. The numbers paint a picture of Ethereum, which is constantly growing but not at the forefront of the market's high performers. But this direct comparison could be misleading, and a turning point could be imminent.

Behind the scenes - on the blockchain - current developments suggest that ETH is on the eve of its own spectacular rebound. The data shows what is going on with Ethereum and whether this is the right time to buy Ethereum (ETH).

Ethereum whales buying in

The last on-chain data from Santiment show a striking change on the ETH network. The activity of the so-called Ethereum whales, the largest individual investors on the platform, has increased significantly. In particular, the 200 largest ETH wallets have significantly increased their holdings. Collectively, they now own about 62.76 million ETH, equivalent to a market value of about $124 billion. Notable is the huge increase in their holdings by more than 30 percent since Nov. 21, 2022.

This observation is supported by another indicator: the number of new Ethereum wallets has skyrocketed. Growing interest in ETH is evident with the creation of 94,700 new wallets in one day - the largest increase since July. This could indicate that not only existing investors, but also many new investors want to join the Ethereum movement.

Whale activity suggests strategic positioning by the largest investors in Ethereum, which is often seen as a leading indicator of market-changing developments in the cryptocurrencies world. It is reminiscent of stock market scenarios, where insider trading often indicates non-public knowledge of a company's future performance. The main difference in the crypto market, however, is the transparency of the blockchain. While insider trading in stocks usually takes place in secret, the movements of Ethereum whales are visible to all on the blockchain.

This provides a unique opportunity to observe and analyze the strategies and movements of large investors in real time. This open data provides insights that would be unthinkable in the traditional financial market and allows the community to participate in the strategies that may be based on insider information from large investors.

Ethereum stock market shares melt away

Another bullish development that can be observed on the blockchain is the decline of Ethereum holdings on crypto exchanges. From the beginning of 2021 to today, it can be observed that the amount of ETH held on exchanges has gradually decreased. According to Glassnode ETH holdings on crypto exchanges have fallen from more than 30 million to less than 20 million since 2021 - a drop of more than a third in less than three years.

The decline in the amount of Ether held on exchanges suggests that investors are increasingly focused on holding their ETH for the long term or investing in DeFi protocols and other projects built on the blockchain ETH. If the amount of ETH available decreases while interest and demand for Ethereum - whether for speculation, investment or use in dApps - remains the same or increases, a seller's market is created that can encourage price appreciation.

Record high for Ethereum in smart contracts

At the same time, the amount of Ethereum in smart contracts has a historic high reached of nearly 33 percent. This means that an increasing portion of the total Ethereum inventory is integrated into applications and projects on the Ethereum blockchain. This shows how much the Ethereum ecosystem continues to be used and how many investors trust the network and are willing to commit their capital to smart contracts.

The increasing integration of ETH into smart contracts highlights the continued relevance and potential of Ethereum-based applications. It also shows that a significant portion of ETH is now locked into projects, further depleting the freely available supply in the market.

Signs of a stock price rally?

These various factors - rising accumulation by whales, declining stocks in the stock market and rising amounts of ETH in smart contracts - could actually indicate that Ethereum is poised for a significant price rally. In particular, whale accumulation resembles a pattern we have seen in October on Chainlink have observed.

This historical similarity suggests that we could be on the eve of a similar development in Ethereum. The combination of strong investor activity, declining stock market stocks and increasing use of blockchain technology through smart contracts could be the perfect recipe for an upcoming Ethereum rally. It appears that the stage is set for a significant bounce in the Ethereum market. Current data on the chain could be the key to this expected price movement.