Ethereum Whale Accumulation Suggests Favorable Price Movement

Ethereum's recent surge to a ten-month high of $2,140 before collapsing by roughly 17% has raised concerns among investors. However, some indicators suggest that the decline might be temporary. According to crypto analytics firm Coinpaprika, there has been significant growth in the number of whales and sharks in the past 12 months, with 380 more addresses holding 1,000 or more Ethereum (ETH) compared to last year, representing a 5.7% rise in large-volume investors. Such high accumulation levels have often signalled significant price movements, typically in a favourable direction, and usually occur at the same time as price bottoms.

Moreover, the overall market volatility and the recent Shanghai upgrade have resulted in a noteworthy change in investor attitude towards Ethereum, recognizing the blockchain network's potential for the future. Data from Coinpaprika shows that investors have deposited over 571,000 ETH tokens worth over $1 billion into staking contracts. Most of these deposits were made through institutional staking service providers and also from investors reinvesting their rewards after withdrawing them.

Furthermore, developers seem to be stopping at nothing to tackle one of the network's biggest problems – gas fees. Builders have been focusing on scaling solutions such as the zero-knowledge Ethereum Virtual Machine (zkEVM), which allows some data (particularly signatures) not to be included on-chain, saving on gas costs. In a recent blog, Vitalik Buterin noted that "the first steps of the transition may happen sooner than we expect" once we switch to Verkle trees and clients start gradually using ZK-EVMs.

At the time of reporting, Ether was trading at $1,906, up 0.43% in the past 24 hours. The price needs to surge and close above the $2,100 resistance for more upside.