A blockchain data analytics service known as Glassnode recently revealed that Ethereum addresses that are holding 1,000 ETH or more have plummeted. The recent number of whales was at 6,292, a significant drop from 7,239 in January. What are the reasons for this flight of whales? Is this something we should be concerned with? How will this affect the market? The first thing we must acknowledge is the unprecedented rise in the number of non-fungible tokens that are being sold; a majority of whom use ETH as its preferred medium of exchange. The movement of ETH, while relatively impressive, does not account for the movement of whales. So what about the early adopters? The ones who bought in when ETH was a few bucks? This is likely the culprit of who these whales are. After all; if you bought a thousand ETH at a dollar, why would you not capitalize on a few million bucks?
What is concerning is we are starting to get close to what seems to be an impending sell-off. We are likely to see a reshuffling of the deck so to speak. Where we will have the larger whales sell as the small time accumulators buy up the crumbs. The good news here is that this year has proven cryptocurrency to be a profitable market to partake in. There is little doubt that masses of investors will gobble up ETH at the right price. The question we must ask is at what price point is that? Likely a thousand dollars will see a monumental amount of buyers, but the question is when and how it reaches $1K. If we have a slow steady decline to $1K it is almost certain we will see a lack of enthusiasm. If however we get there quickly it will be like chum in the water for investors. So far it does not look great for the short term in the crypto markets and we are cautious about placing any money in the market just yet until we see a firm decision which way the new year is going to go.