Within three months, non-exchange crypto custodians reportedly witnessed an 11% reduction in assets held by whale wallets. Meanwhile, on-chain exchanges allegedly saw a significant increase of 78% in assets held by whale wallets.
Assets In Top Ten ETH Whale Wallets On Exchanges Rose By 78%
The Ethereum network has been stirring the whole crypto markets nigh and forth since it announced its prolonged merge. The merge upgrade, which would transit the network from PoW to the PoS consensus model, is slated for September 15.
Right after the announcement of the date, Ethereum’s native token, ETH, surged significantly on a brief bullish run in July. During the surge, ETH registered a new high price of $2000 after six months of dip.
However, the sentiment and price action of the Ethereum network seem to decline as the merge approaches continuously. It is evident as a large portion of ETH whales witnesses a significant reduction in their assets.
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Sentiment, a crypto analytic firm, reported that top ETH whale wallets had transferred large portions of their holding from non-exchange wallets to exchanges. Consequently, non-exchange wallets record an 11% loss while wallets on exchanges record a 78% increase.
Analysts Warned That ETH May Rise Before Merge And Fall After It
Analysts consider the influx of crypto assets into exchanges as a negative sentiment and a tool many traders use to scalp profits from selling their assets. They also hinted that the whales’ actions showed they believed that the market would decline further very soon.
Some analysts also suggested the hype around the much-anticipated merge would die down after its arrival. Furthermore, they hinted that the price of ETH may skyrocket as the upgrade approaches, but it may not stay aloft after its establishment.
The Ethereum network started its transition to the PoS consensus model in December 2020 with the Beacon chain. The second stage is the upcoming Merge, initially meant to come in 2021 but failed due to some technical delays.
The Merge is the second of three processes on the network’s transitional roadmap. It is not the real deal, but it is, however, crucial as it would introduce the PoS model.
Nonetheless, the improved scalability, cheaper fees, sharding, reduced energy consumption, eco-friendly, and higher transaction speed benefits would come with the completion of the third and final stage.
Therefore, analysts argued that since the Merge is not the real deal, it may not consolidate ETH price at peak levels after its emergence.