The Ethereum market is currently presenting a complex puzzle for investors. On one hand, network activity and retail participation are waning. On the other, blockchain data reveals a starkly different narrative of aggressive accumulation by major holders. This tension between price weakness and institutional buying pressure defines the current landscape and suggests a critical directional decision is imminent.
Institutional Accumulation Defies Retail Exodus
A clear divergence is emerging between on-chain fundamentals and price action. The number of daily active addresses has plummeted to a seven-month low of approximately 327,000. This decline signals either a retreat by smaller users or a migration of activity to Layer-2 scaling solutions. In sharp contrast, the behavior of large-scale investors, often called “whales,” tells a different story. Wallets holding between 10,000 and 100,000 ETH have collectively acquired more than 800,000 Ether since mid-October. Market observers interpret this sustained buying as positioning by sophisticated players anticipating a potential trend reversal.
Shrinking Exchange Supply Creates a Structural Support
A separate factor with potentially bullish medium-term implications is the growing illiquidity on trading platforms. The proportion of Ethereum’s total supply held on centralized exchanges has dropped to just 8.6%—a historic low since the asset began public trading. Investors are increasingly moving their coins into private cold storage or committing them to staking contracts. This trend significantly reduces the readily available sell-side pressure, which could amplify upward price moves if demand returns.
Should investors sell immediately? Or is it worth buying Ethereum?
Price Pressure Meets a $600 Million Bet
Despite these supportive fundamentals, ETH faces short-term selling pressure. The price currently stands at $2,934.75, reflecting a 24-hour decline of 1.69%. Nevertheless, a single massive transaction today captured market attention: reports indicate a well-known large investor initiated a long position worth $600 million. Given this address’s history of accurately anticipating major market turns, its latest move is being closely scrutinized by the investment community.
Technologically, the network continues to advance on schedule. The “Fusaka” upgrade activated in early December is already contributing to lower transaction costs. Furthermore, new protocol updates within the decentralized finance (DeFi) sector are designed to enhance liquidity options for institutional stakers.
The present market phase resembles a classic accumulation zone. While sentiment among retail investors remains subdued, record-low exchange reserves coupled with substantial purchases by major holders indicate that “smart money” views current price levels as a strategic buying opportunity. Should this institutional bet prove correct, the dramatically tightened supply could act as a powerful catalyst for prices when broader demand re-enters the market.
Ad
Ethereum Stock: Buy or Sell?! New Ethereum Analysis from January 30 delivers the answer:
The latest Ethereum figures speak for themselves: Urgent action needed for Ethereum investors. Is it worth buying or should you sell? Find out what to do now in the current free analysis from January 30.
Ethereum: Buy or sell? Read more here...
