The whales are moving their ETH funds to exchange addresses. The native token of the Ethereum network has been the most traded in the crypto market since August. Binance will suspend ERC-20 token deposits and withdrawals during The Merge.
Major investors in the Ethereum (ETH) network are sending their holdings in the asset to exchange addresses, according to a study by Santiment.
The Merge, an event where the ETH mainnet will merge with the Beacon Chain and adopt the Proof-Of-Stake (PoS) method as a consensus, has entered the countdown after the Ethereum Foundation confirmed that the event should take place between September 10 and 20.
The merger, long-awaited by networking enthusiasts, has had a positive impact on the price of the world’s second-largest cryptocurrency. Since the Ethereum 2.0 date was announced on July 15, the network’s native token has surged 70%, according to TradingView, despite undergoing a price correction in recent weeks.
However, this upward trend could quickly reverse, due to the movements that whales make in the net. Data from analytics firm Santiment shows that leading Ethereum cold wallets have reduced their ETH holdings by 11% in recent months, moving their crypto to swap addresses.
In theory, sending large amounts of an asset to exchanges is considered negative, as it indicates that large investors want to sell or exchange these tokens for other cryptocurrencies. In this case, this could increase the selling pressure of ETH, causing its price to drop considerably.
ETH Demand Continues to Rise
On the one hand, the movement of the whales can cause the price of ETH to fall, but the general demand for the asset is still a bullish indicator. An analyst from CryptoQuant highlighted that the cryptocurrency currently has the highest demand in the market, surpassing even Bitcoin (BTC).
In August, Ethereum accounted for 40% of all trading volume in the cryptocurrency market, while BTC absorbed around 30%. Thus, The Merge continues to boost the asset, despite the price corrections that the crypto market has been suffering in recent days.
Binance Will Suspend Withdrawals and Deposits during the Merger
In a statement, Binance announced some security measures that will be taken in relation to The Merge. Users of the world’s largest exchange in terms of trading volume were unable to deposit or withdraw ERC-20 tokens on September 6 as of 8:00 a.m. m., Brasilia time.
On this date, the merger will be updated in the Bellatrix consensus layer, marking the initial step towards ETH 2.0. On September 14, the date set for the Paris execution layer update, withdrawals, and deposits will be suspended from 21:00 GMT.
Despite the closures, other activities related to ETH and other ERC-20 tokens, such as spot and futures trading, are expected to function unchanged during The Merge, in addition to lending and asset sharing.
By Audy Castaneda
