Major Ethereum cold wallets have transferred 11% of their funds to exchange addresses over the last few months. Although the whales may drive the price of ETH lower, the overall demand continues to be a bullish indicator.
Leading investors on the Ethereum network are transferring their holdings to exchange addresses, according to analytics platform Santiment.
The Merge to change the consensus protocol of the Ethereum network to proof of stake (PoS) has entered the countdown. The Ethereum Foundation has already confirmed that it expects the event to occur between September 10th and 20th.
The long-awaited Merge has driven the price of the second-largest cryptocurrency by market capitalization higher. Following the announcement of the Ethereum 2.0 date, Ether (ETH) has risen by 70% despite a correction, according to TradingView.
However, the behavior of the whales might quickly reverse the bullish trend of the price of Ether. According to Santiment, major Ethereum cold wallets have moved 11% of their ETH holdings to exchange addresses over the last few months.
The transfer of large amounts of Ether to exchanges indicates that leading investors want to sell or exchange their holdings for other cryptocurrencies. That might increase the pressure to sell ETH, causing the price to fall significantly.
The Behavior of the ETH Whales May Affect the Price
Although the whales may drive the price of ETH lower, the overall demand is still a bullish indicator. According to a CryptoQuant analyst, Ether is the most highly sought-after cryptocurrency in the market.
Last month, the trading volume of Ether accounted for 40% of the overall crypto market, while BTC gained around 30%. The Merge continues to boost the crypto asset despite the price corrections in the industry over the last few days.
Cryptocurrency exchange Binance stated it would suspend withdrawals and deposits during the Merge as a security measure. Its users will not be able to deposit or withdraw ERC-20 tokens on September 6th.
The Merge upgrade will occur at the consensus level of Bellatrix that day, taking the first step toward ETH 2.0.
On September 14th, the date set for the Paris execution level upgrade, there will also be withdrawal and deposit suspensions.
Despite closures, other ETH-related activities, like spot and futures trading, will remain unchanged during the Merge.
Meanwhile, Bitcoin Enters a Historically Negative Month
Since 2017, September has been a negative month for the Bitcoin (BTC) market in terms of statistics. Although the pioneering cryptocurrency has dropped by 20% since August 1st, it might suffer a further drop this month.
During the previous five years, the monthly drop in the BTC price was around 8.5%. However, some cryptocurrency analysts think 2022 will be different, as falling prices have raised fundamentals, on-chain activity, and adoption.
A massive sell-off led the BTC price, which has been inactive for a while, to drop below USD 21,000. The demand on the Bitcoin network has decreased due to the low fee rate (below 3%) on total volume rewards.
When the total block premium exceeds 3% in terms of fees, there will be an increase in the trading volume on the network. Since the demand is still minimum, investors should look toward a bearish rally to indicate a positive trend.
By Alexander Salazar
