The Ethereum (ETH) price is swinging either side of the $3,000 level as traders monitor a spike in whale purchases and ask whether the cryptocurrency could soon be set for a rebound.
On-chain-focused analytics X account @lookonchain reported on Wednesday that a whale recently accumulated $32.14 million in ETH.
A whale who is long $ETH withdrew 6,030 $ETH($18.09M) from #Binance again 20 minutes ago.
This whale has accumulated 10,758 $ETH($32.14M) from #Binance since May 2.
He swapped $ETH to $stETH and deposited it into #Aave, then borrowed $28.5M stablecoins from #Aave to buy more… pic.twitter.com/tbtXLDbvua
— Lookonchain (@lookonchain) May 9, 2024
These tokens were withdrawn from Binance, before being sent to Aave to borrow $28.5 million in stablecoins.
These stablecoins were then promptly used to buy more Ethereum.
Increased buying activity from whales is almost always taken as a good sign for a cryptocurrency.
Whales are often looked at as smart money that might have some market insight the rest of us don’t.
Ether bulls will be hoping that accumulation from this whale marks the bottom of ETH’s recent dip.
The Ethereum price, last at $3,020, is down 26% versus its early March highs.
Ethereum Underperforming Bitcoin – Here’s Why
The downturn in the Ethereum price since March is mostly a result of broader market conditions turning less bullish.
After hitting record highs above $73,000 in March on ETF demand optimism, easing ETF flows and macro headwinds have forced Bitcoin lower to the $62,000s.
However, where Bitcoin is currently down around 15% versus its March peak, Ethereum’s pullback has been harsher.
That can partially be explained by the fact that Ether is generally a higher beta asset versus Bitcoin. That’s to say, its likely to perform relatively better in times of risk-on and relatively worse in times of risk-off.
But its also likely due to the pricing out of optimism that spot Ethereum ETFs will soon gain approval.
There won’t be an #Ethereum ETF this month.
It is likely to be a delay or extension of 60 days, during which July/August will be the big moment for the markets.
In terms of expectations?
The markets are bottoming in the next 1-2 weeks and rotate back up from that news.
— Michaël van de Poppe (@CryptoMichNL) May 9, 2024
The SEC is widely expected to reject these ETF applications this month as it probes crypto firms for evidence that Ethereum might be a security.
However, given these rejections are now widely expected, this is unlikely to have much market impact.
Ethereum Price Prediction – Where Next for ETH?
While whale activity has some hoping the Ethereum price could soon rebound, technical analysis suggests the outlook remains fragile.
The Ethereum price remains locked within a downward trend channel that has been in play since March.
It has also broken to its 50 and 100DMAs. A recovery to the $3,200 area is plausible, but this is a very strong area of resistance.
With the next leg of the crypto market rally unlikely to take hold anytime soon, Ether could continue to struggle.
A test of support at $2,700 in the coming weeks is very plausible, especially if Bitcoin dips back under $60,000.
This is roughly in line with where the 200DMA resides and so should be a strong zone of support.
Ether Turns Inflationary as Ethereum Fees Drop
The recent Dencun upgrade has reduced Ethereum fees by as much as 4x, according to CryptoQuant data.
#Ether turns inflationary for the first time since Merge :
This marks the first period of #Ethereum becoming inflationary in the past year and a half since the Merge took place.Total Ether supply increased to 120.1 million on May 7, from 120 million on March 12, before the… pic.twitter.com/qxeIxPl1X4
— TOBTC (@_TOBTC) May 9, 2024
That has substantially reduced the cryptocurrency’s burn rate, with the Ether supply recently turning inflationary as a result.
This has concerned some ETH traders. Many see continued ETH deflation as a key value proposition for holding the cryptocurrency.
However, these traders must remember the chilling impact that high fees has on Ethereum’s adoption.
If Ethereum is going to retain its spot as the dominant smart-contract-enabled blockchain in web3, lowering fees is key.
After all, why would everyday users choose to transact on Ethereum if fees are 100x higher than on other chains.
ETH Alternative to Consider – Mega Dice (DICE)
Crypto investors looking for investments with greater upside potential than ETH should check out presale investing.
Web3 projects and protocols often sell their native tokens at a discount to early investors to raise funds for development.
If presale investors can find a good project that gains traction in the market, they can book exponential gains.
One project that analysts at Cryptonews are a big fan of is Mega Dice Casino.
This already well-established crypto casino has launched a presale of its utility token, DICE.
DICE holders get big cashback benefits on their wagers and can generate passive income via DICE staking.
The crypto casino is also running a $750,000 airdrop to reward early presale investors.
The $DICE presale has raised $800k! 📈
Only $200k left before the next price increase 🚀
Join the #1 GameFi project on Solana 🏆
BUY $DICE NOW 👇🏻
🔗 https://t.co/Pk6R16oOKk pic.twitter.com/3QzRpoSNAr— Mega Dice Casino (@megadice) May 7, 2024
The project has already raised $870,000. Potential investors may want to move quickly, as the DICE price will rise when the $1 million milestone is hit.
Check Out Mega Dice Casino’s Presale
Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.
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