Ethereum (ETH) whales have been offloading significant amounts of the cryptocurrency amid market turbulence and liquidations.
Data reveals that large-scale ETH holders, including some of the biggest whale wallets, moved their assets to centralized exchanges or protocols to lock in gains or cover loans.
ETH sell-offs surge amid market uncertainty
The recent volatility in the Ethereum market led to notable sell-offs among significant players. On-chain data indicates that several whale wallets liquidated their ETH holdings, reversing the earlier accumulation trend. Institutional players like Amber Group and Cumberland also sold their ETH assets to mitigate short-term losses. Notably, the sale of 6,443 ETH on Tuesday contributed to a downward price trend. This selling activity followed nine days of outflows from some of the largest Ethereum ETFs.
Grayscale’s decision to reduce its token holdings contributed to these ETF net sell-offs. Meanwhile, other funds displayed lower demand, with few new token additions. However, Ethereum recovered to $2,503.03 despite this selling pressure after a swift correction. The market’s open interest dipped to approximately $7.7 billion, but ETH longs continued to dominate, buoyed by recent short liquidations.
Losses hit Ethereum whales
Several Ethereum whales faced losses during the market downturn, with some forced to liquidate their ETH holdings around the $2,400 level. One prominent whale wallet, identified as “token millionaire” by Nansen, had accumulated ETH before the August 5 correction in anticipation of a price rally following the ETF launch. However, the downturn compelled this whale to sell near recent market lows, holding DAI stablecoins and preparing to swap them into USDS for future DeFi activities.
Other whale wallets also moved away from staked ETH positions, converting their assets to mainnet ETH. One wallet sold 5,145 ETH on Binance, while two others offloaded ETH to avoid liquidation on the Aave lending protocol, resulting in 8,208 ETH sold.
Ethereum Foundation and institutional sales add pressure
The Ethereum Foundation joined the ranks of significant sellers last week, opting to convert some of its ETH holdings into fiat currency to boost its budget. The Foundation sold 35,000 ETH through Kraken, coinciding with a market local top, just before an 8% price decline. The organization, which currently holds a $100 million fiat budget, has indicated that it will sell ETH periodically to maintain its funding levels.
Despite these sales, the overall volume remains small compared to the accumulated ETH. However, the short-term impact of profit-taking could affect momentum, especially as Ethereum has underperformed compared to Bitcoin (BTC) and Solana (SOL) during the 2024 bull cycle. Although some metrics indicate slightly bullish sentiment, these are primarily based on short-term trader behavior.
The Ethereum network has seen increased token production, adding over 16,000 ETH in the past week alone. While most tokens remain on the network due to a slower burn rate, the inflation rate has expanded from 0.53% in the previous quarter to 0.73%. Ethereum’s total supply now stands at over 120.3 million, up from 120.07 million at the start of the year.
While Ethereum continues to secure L2 transactions, the narrative of ETH as sound money has weakened, prompting some sell-offs. Analysts suggest that Ethereum’s utility role remains critical, particularly in securing rollup chains, even as market sentiment fluctuates between short-term optimism and longer-term caution.