It looks like Ethereum whales are gearing up for a price increase in ETH as most of them are moving money around from exchanges and into their wallet and into staking protocols.
This move is typically seen before a huge price increase because most whales preferes to hold their ETH in their own wallet rather than exchanges if they are not planning to sell or want to earn passive rewards through decentralized staking.
Ethereum Dendun Upgrade seems to play a huge role in this because it seems that the upcoming upgrade might increase users transaction volume, hence increasing ETH’s price.
Whales Withdrew and Staked Almost $100 Million in ETH
The discovery was first done by Lookonchain, an analytical platform on the crypto space, where they found that in the past week a lot of whales seems to be moving ETH from exchanges to their own decentralized wallets.
Typically when a lot of whales move crypto from exchanges into their wallet it is seen as a sign before price increase, because according to on chain analysis theory, this is what is called outflow, a condition where money comes out from exchanges into investor’s decentralized wallets.
When outflow happens it is typically seen as investors, or in this case whales, are looking to hold for a longer period of time.
Conversely, when a huge inflow happen, which is a condition where crypto goes from investor’s wallets into exchanges, it is seen as signs before price correction, as it is easier for investors to use exchanges to sell their crypto and deposit it into their bank account to realized their profit.
As of right now, looking at Etherscan, a lot of whales seem to be moving their ETH into wallets and into staking protocols, essentially supporting ideas of an upcoming price increase.
Compiling some whales that have been detected moving their ETH around, it can be seen that there are around 5 whales withdrawing around 2,000 ETH to 3,000 ETH daily in the past week.
Overall, the amount of all of the detected wallets has reached around 29,057.92865146 ETH in outflow coming from exchanges such as Kraken and Binance.
Most of these are investors that are just withdrawing their ETH from exchanges and keeping them in their wallets, but some of them have been seen transferring ETH to staking protocols and DeFi protocols to maximize their profit.
The amount of ETH on their wallets also ranges a lot, from only around 3,000 ETH to 26,000 ETH, which is a significant skew amount ETH whales holdings.
Overall in just the last week the overall outflow of those five whales has reached almost $100 Million, totalling about $95,600,585.27 counted by the price of ETH when it was at $3,290.
This is also excluding other whales that are undetected, which is no surprise of why ETH price is going up significantly right now.
Ethereum Upgrade Right Around The Corner
The huge outflow volume arguably came from the news of Ethereum Dencun Upgrade, which is set to be the next biggest Ethereum upgrade aside from The Merge or Ethereum 2.0 upgrade.
Dencun upgrade is set to bring a mechanical upgrade to the blockchain through new implementation of a transaction processing method called “blobs”.
Blobs are a grouping mechanism for Ethereum to communicate better with its layer two blockchains so that transactions can be grouped before being sent to those layer two blockchains and be validated.
Also with the upgrade, layer two blockchains do not need to store data of those transactions anymore because with this upgrade, the relationship between Ethereum and its layer two blockchains will be more efficient where Ethereum stores the data and the layer two blockchains process the transactions.
It is predicted that the speed of Ethereum will increase significantly with this upgrade, reaching around 100,000 transactions per second at its maximum capacity while lowering its transaction fees lower than $0.1 per transactions.
The prediction comes from the Ethereum developer community but is not denied by the core developers of Ethereum, the Ethereum Foundation itself.
Ethereum foundation also solidified the news of the upgrade with an article that has just been published, prompting nodes of Ethereum to upgrade their node so the transition for the upgrade can be smoother.
The article also confirmed that the schedule for the launch of the Dencun upgrade is still set to happen on March 13th, 2024.
Looking at the previous significant upgrade of Ethereum, such as The Merge, the price of ETH can rise significantly, which might be the reason all the whales are moving their balance into wallets and staking it to earn more.
Overall, the condition around ETH is looking solid, but be aware that volatility can happen anytime so it is still better to stick with a good risk management and trading plan to not endure loss when sudden movement occurs.
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