The Ethereum meltdown is only about two days away according to the difficulty adjustment, and sentiment around ETH during this time has peaked. Most of these events were bullish, but some things that happened in the market started to trigger negative sentiment from investors. Most of the time, these were large whale trades transferred to centralized exchanges, raising fears that there could be massive dumps along the way.
Rise of the Ethereum Whale transaction
Prior to the merger, Ethereum whale activity increased. The most notable of these were the large transactions who moved ETH to centralized crypto exchanges such as Binance. Naturally, investors began to wonder if these trades were random or a coordinated dump effort.
The first transaction that raised eyebrows was a total of 150,811 ETH that was moved from an unknown wallet to another unknown wallet, which was later identified as being moved from the OKEx exchange to Binance. At the time of the transaction, the dollar value of the transaction was $259.78 million. While that wouldn’t have been a big deal on its own, other large trades to centralized exchanges would soon follow.
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An additional 29,879 ETH worth $51.47 million was then transferred from an unknown wallet to the OKEx exchange. The following transaction transported 119,515 ETH worth $207.6 million from an unknown wallet to the Binance exchange.
22,397 ETH worth $38.56 million were then transferred from Bitfinex to an unknown wallet. While another large transaction of 37,499 ETH worth $64.57 million was transferred from an unknown wallet to another unknown wallet. All of these transactions took place within an hour, sparking rumors of a dump after the Ethereum merger was completed.
ETH trading below $1,600 | Source: ETHUSD on TradingView.com
Do whales dump ETH?
These large transactions that transport massive amounts of ETH on centralized exchanges paint a bearish picture for the digital asset in the short term. Now, the Ethereum merger has garnered a lot of hype, but it, too, is starting to look like another “buy the rumour, sell the news” event.
If so, the price of ETH is likely to spill from these large whales losing their post-merger holdings. A lot of ETH had also been accumulated because investors had wanted to take advantage of airdrops of ETH that would come from hard forks. However, once the merger is complete, these investors will no longer need to hold their ETH, and many will likely dump it.
It should also be borne in mind that it is transactions that are tracked on centralized exchanges. Others choose to go the centralized route, where they will also likely dump. However, centralized exchanges offer the most liquidity for such large transactions.
To be better prepared, investors should keep an eye on ETH charts post-merger and ensure they have adequate risk management for particularly popular events like this.
Featured image from The Cryptonomist, chart from TradingView.com
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Large ETH trades at exchanges spark fears of market dumping
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