The recent Shapella upgrade on Ethereum has caused a decrease in the share of Ether held by large investors, known as “whales.” Glassnode data shows that the amount of Ether held by whale addresses with 1,000-10,000 ETH dropped from 14.167 million ETH to 14.033 million ETH since the upgrade in mid-April. This suggests that these investors may be leaning bearish in the near term.
Other Address Cohorts Also Showed a Decline
In addition to the decline in whale addresses, other address cohorts, including sharks (100-1,000 ETH), fishes (10-100 ETH), crabs (1-10 ETH), and even mega-whales (10,000+ ETH), also showed a decline. The only group to accumulate during this period were shrimps (<1 ETH), with their net position slightly increasing from 1.79 million ETH to 1.80 million ETH.
Implications for ETH Price and Market Indicators
Historically, fewer Ether whales typically mean heightened downside risk for the ETH price, as whale activity typically acts as a leading market indicator. The price-to-whale correlation existed until March 2020, after which retail mania and the Federal Reserve’s quantitative easing caused the correlation to snap. However, since then, whale holdings have risen by nearly 1 million ETH, while ETH’s price has more than doubled to around $1,850, hinting at a possible return of the price-to-whale correlation, which would be a bullish sign for Ether.
The $2,000 level is an important psychological resistance level for ETH/USD that bulls have been unable to break despite multiple attempts in 2023. On the daily chart, ETH/USD holds above the short-term support provided by its 50-day exponential moving average (EMA), near $1,840. A successful rebound from here opens $2,000-$2,125 as the next upside target range in the second quarter. Conversely, a break below the 50-day EMA risks sending ETH toward its 200-day EMA near $1,670, down about 10% from current price levels.
Overall, the decrease in Ether holdings by whale addresses and other address cohorts may suggest a bearish outlook in the near term. However, the possible return of the price-to-whale correlation would be a bullish sign for Ether. Investors should keep a close eye on ETH’s price movements and market indicators to make informed investment decisions.