This week, the number of Ethereum addresses with at least 1,000 ETH fell to a four-year low.
Ethereum is having trouble keeping its wealthiest investors on board, as its native coin, Ether (ETH), appears to be headed for further losses in the near future.
Blockchain data analytics service Glassnode revealed that the number of Ethereum addresses holding at least 1,000 ETH dropped to 6,292 this Monday, the lowest reading since April 2017. At its year-to-date peak, the numbers were 7,239 in January.
To determine retail and institutional sentiments, on-chain experts look at ETH distributions among addresses. They classify wallets with more than 1,000 ETH (about $3.92 million at current exchange rates) as “whales,” owing to their capacity to affect market patterns in the short term through big sell and/or buy orders.
However, the decline in the number of so-called whales demonstrates a continued selling tendency among the wealthiest Ethereum wallet users. For example, the number of Ethereum addresses holding at least 10,000 ETH (about $39.20 million) has decreased by nearly 4.5 percent, from 1,208 in June to 1,156 at the time of writing.
But, on a year-to-date timeframe, the numbers have gone up from 1,065 to 1,156, just as the cost to purchase 1 ETH, in the same period, has jumped nearly 450%.
Small investors are accumulating
Wallets that hold tiny amounts of ETH, unlike whales, have been at the vanguard of Ether’s 2021 price rise.
The number of Ethereum addresses with a non-zero ETH balance, for example, reached an all-time high of over 71.23 million on Monday, according to Glassnode’s data. The number of wallets having at least 0.01 ETH ($40) increased to 20.31 million, up from 10.66 million at the start of the year.
Meanwhile, the number of addresses holding at least 0.1 ETH ($400) increased to 6.44 million on Monday, up from 3.62 million on January 1, 2021. This is an almost twofold increase in retail interest in the world’s second-largest cryptocurrency.
ETH eyes bullish reversal
The latest decline in Ether whales appeared as Ether struggled to close decisively above $4,000, its psychological resistance level.
On Tuesday, ETH/USD dropped by over 3.27% to an intraday low of $3,880. Its drop came as a part of a wider correction that started after Ether tested a downward sloping trendline as resistance on Dec. 23.
The chart below shows that the trendline is a part of a descending channel that appears like a “falling wedge.”
Falling wedges are technically bullish reversal patterns that form after price moves lower within a trading range with two converging trendlines. After reaching the pinnacle, the instrument eventually breaks over the structure’s upper trendline (where two trendlines converge).
In a rising wedge scenario, the profit goal is usually calculated by adding the greatest distance between the structure’s upper and lower trendlines to the breakout point. Depending on the breakthrough level, this puts ETH’s price in the $4,200–5,000 range.
Nevertheless, Ether’s price still has enough room to decline, toward $3,200 in the worst-case scenario. The level is where wedge’s trendlines converge.
Meanwhile, independent market analyst Pentoshi said that nothing concrete can be predicted for Ether now as it remains stuck between a “bear contested” and a “bull contested” area, as shown in the chart below.
“Maybe it’s the bottom. Don’t care,” tweeted Pentoshi on Tuesday.
“I don’t like when them market gives this many times to buy an area with important historical context like this Would rather pay for confirmation.”