Ethereum
Are Developers Prioritizing Short-term Fixes?
Ethereum is a legacy network, but it has been rapidly evolving. It has adapted to environmental needs, for example, while looking for ways to scale. Several hard choices have been made, including shifting from a proof-of-work to a proof-of-stake system.
However, Péter Szilágyi, a developer and team lead at Ethereum, is concerned about how “malleable” Ethereum is becoming.
Ethereum Prioritizing Short-Term Fixes Over Protocol Integrity?
Taking to X, Szilágyi criticized the project’s development direction. The team lead noted an increasing trend of developers prioritizing short-term fixes over the protocol’s long-term health.
This criticism comes at a time when regulators have been scrutinizing Ethereum, and even the United States Securities and Exchange Commission (SEC) reportedly considers ETH as an unregistered security. It is the decision that has been made around this that Szilágyi is worried about.
The developer is concerned that the constant tinkering with core protocol rules to appease regulators is a recipe for disaster. This “co-opting tiny decisions here and there,” the team lead said, risks morphing Ethereum into a traditional finance (TradFi) clone.
When this happens, the core tenets of decentralization and the technically elusive “censorship resistance” feature in TradFi, will be sacrificed.
Szilágyi thinks Ethereum is on a losing path, especially regarding the Maximal Extractable Value (MEV) issue. In Ethereum, validators, tasked with approving transactions in no particular order but depending on the attached gas fee, can “capture” value by changing the transaction order within a block.
Danger Of Centralization: MEV Issues Not Addressed, Suspicion On Liquid Staking
The developer said MEV’s negative effects have not been addressed yet. However, instead of dedicating time and effort to fix it, the focus has shifted towards “catering the protocol and infra around it to proprietary MEV builders.” Adopting this path, Szilágyi argues that Ethereum developers are essentially handing to a centralized lot, watering the decentralization in the second most valuable network.
Beyond MEV, the developer also thinks the rise of liquid staking solutions like Lido Finance will destabilize the network.
ETH holders can earn rewards through liquid staking platforms without running a validator node. Over time, the Szilágyi worries that only a few operators will wield strong network control, increasing concentration.
Whether developers will heed Szilágyi’s concerns remains to be seen. However, what’s clear is that developers have been introducing implementations on the mainnet to enhance user experience and reduce costs.
In the latest upgrade, Dencun, developers made trading on layer-2 protocols like Base and Arbitrum cheaper. As seen from the Ethereum roadmap, there will also be more efforts to scale the mainnet via Sharding in the coming years.
Feature image from Canva, chart from TradingView
Ethereum
Number Of Ethereum Whales Holding 10,000 ETH Down By 7% — Implication For Price?
The crypto market recently suffered a significant downturn due to the escalating geopolitical tensions in the Middle East, with several large-cap assets shedding their recently-accrued gains over the past week. Specifically, the price of Ethereum crashed from above $2,600 to as low as $2,300 at some point during the week.
This represents a fresh setback for the “king of altcoins,” which has not had a particularly positive performance in the past few months. Interestingly, a popular crypto pundit on X has come forward with an on-chain observation into the behavior of Ethereum investors over the last quarter.
How Ethereum Whales Shaving Off Their Holdings Will Impact Price
In a recent post on the social media platform X, crypto analyst Ali Martinez revealed that a particular group of Ethereum whales has been shaving their holdings over the past few months. This on-chain revelation is based on the Mega-Whale Address Count, which tracks the number of addresses holding more than 10,000 units of a particular cryptocurrency.
Whales refer to entities (individuals and organizations) that own significant amounts of a specific cryptocurrency (Ether, in this case). Investors usually pay extra attention to whale movements, as these large entities tend to wield notable influence on market liquidity and prices due to their substantial holdings.
Source: Ali_charts/X
According to Martinez, the number of whale addresses holding over 10,000 ETH has fallen by more than 7% since July 2024. This decline in the population of large Ethereum holders points to some redistribution or profit-taking and suggests a notable shift in market sentiment, especially among large-scale investors and institutional players.
Interestingly, this reduction in whale addresses coincided with a period where the Ethereum price struggled. Despite the approval and launch of spot ETH exchange-traded funds (ETFs), the altcoin’s price fell from above $3,500 in July to as low as $2,200 by August.
As already seen in the token’s price action over the last few months, the decrease in large Ethereum holders could diminish buying pressure on a grand scale, leading to sluggish price movement. Moreover, sustained profit-taking activities by these whales could potentiate downward pressure on the ETH price.
ETH Price At A Glance
As of this writing, the price of Ethereum sits just above the 2,400 mark, reflecting an insignificant 0.1% decrease in the past 24 hours. The cryptocurrency’s performance on the weekly timeframe is not so insignificant, as the ETH price is down by nearly 10% in the past seven days.
The price of ETH rebounds from $2,300 on the daily timeframe | Source: ETHUSDT chart on TradingView
Featured image from Unsplash, chart from TradingView
Ethereum
Ethereum ICO Participant Offloads 6,000 ETH As Bearish Sentiment Intensifies
According to data from CoinMarketCap, the price of Ethereum slipped by 10.23% over the last seven days in line with the general market negative movement. This crypto market downturn has been attributed to multiple factors including heightened geopolitical tensions in the Middle East and rising liquidations of long positions.
While Ethereum has experienced some rebound in the last day gaining by 3.21%, investors remain uncertain of a full price recovery with bearish sentiments raving through the market. Notably, an Ethereum ICO participant has now sold off a substantial amount of ETH intensifying concerns of a prolonged downward trend.
Ethereum ICO Wallet Continues Selling Spree, Offloads 40,000 ETH In Two Weeks
According to data from blockchain analytics firm, Lookonchain, an Ethereum wallet with the address “0xBF4” moved 6,000 ETH worth $14.11 million to the Kraken exchange on Friday. So far, the address has been identified as an early Ethereum investor who acquired 150,000 ETH valued at $368 million in the asset’s initial coin offering (ICO) in 2014.
Data from Lookonchain highlights this is the second ETH sale by “0xBF4” in the last week after the ICO participant initially sold 19,000 ETH, valued at $47.54 million over Wednesday and Thursday. Notably, this ETH whale has transferred out 40,000 ETH worth $101 million since September 22, holding a balance of 99,500 ETH valued at $238 million.
Generally, massive token offloads by large holders e.g. whales are interpreted as bearish signals as they indicate a lack of confidence in the asset’s long-term profitability. Sales such as those seen from “0xBF4” may trigger a panic selling from smaller investors inducing a stronger downward pressure on Ethereum’s price.
Related Reading: Crypto Capo Returns After 2 Months To Predict Ethereum Decline To $1,800, Is It Time To Go Long?
108,000 ETH Moved To Exchanges In 24 Hours
Aside from the wallet address “0xBF4”, other investors have recently sold off large amounts of ETH. According to analyst Ali Martinez, 108,000 ETH valued at $259.2 million have been transferred to exchanges in the last day. This massive sale activity indicates a heightened sentiment in the ETH market.
Currently, Ethereum trades at $2,399 following its recent price rally. However, its daily trading volume has declined by 17.48% and is valued at $14.61 billion. If bearish sentiments persist, ETH could retrace to around $2,200 at which lies its next significant price level. However, amidst massive selling pressure, the altcoin could trade as low as $1,600.
With a market cap of $291.40 billion, Ethereum continues to rank as the second largest cryptocurrency, with a market dominance of 13.47%.
Featured image from NullTX, chart from Tradingview
Ethereum
108,000 ETH Sent To Exchanges, Will It Revisit $2,200?
Ethereum (ETH) has seen a 10.3% drop from last week’s highs following the recent market downturn. Its performance has worried many analysts and investors, considering ETH could be near another correction.
Related Reading
Ethereum Whales Send Millions To Exchanges
Ethereum has struggled to reclaim some key resistance levels since the October 1 correction. On Tuesday, the cryptocurrency saw its price nosedive from the $2,600 zone to the $2,300 mark, hovering between the lower and higher range of that support level for the past few days.
Since then, news of multiple investors moving their tokens has hit the industry, alarming the community. On-chain analytics firm Lookonchain revealed that an Ethereum Initial Coin Offering (ICO) participant sold their tokens as the market bleed.
Per the report, the whale deposited 12,010 ETH, worth $31.6 million, to Kraken a week ago after being inactive for two years. The same address sold another 19,000 ETH two days ago, around $47.54 million.
Today, crypto analyst Ali Martinez highlighted that on October 3, roughly $259.2 million worth of ETH had been sent to crypto exchanges. According to the CryptoQuant data shared by Martinez, 108,000 ETH were sent to exchanges in the last 24 hours, significantly increasing from the day before.
The news continued to fuel the bearish sentiment among many community members, who are disappointed about Ethereum’s performance and fear ETH’s price could soon face significant selling pressure.
Will ETH Revisit Lower Levels Soon?
Crypto investor Ted Pillows noted that ETH has been “one of the most underperforming cryptos in 2024.” Despite the approval of Ethereum spot ETFs (exchange-traded funds), the crypto has “underperformed almost every large cap.”
He also pointed out that ETH surged alongside Bitcoin whenever the market was up but dropped significantly harder when the market struggled. “Whenever BTC has pumped 5%, ETH has pumped 3%, but whenever BTC has dumped 5%, ETH has dumped 12%-15%,” he remarked.
However, Ted explained that every time Ethereum was considered “dead,” like in 2020-2021, it has eventually outperformed BTC. Based on this, the investor believes that ‘the king of Altcoins’ could face “one last flush” to $2,200 before the reversal.
Similarly, trader Crypto General suggested that the cryptocurrency could retest the $4,000 by next month as he expects ETH to bounce from the current levels. However, he asserted that if the price breaks the trendline, “we can easily see the price touching the $2100 level.”
Related Reading
Other market watchers pointed out that Ethereum must reclaim the $2,400 resistance level to see a potential bounce toward $2,800. Previously, Daan Crypto Trades set the $2,850 resistance level as one of the key levels to watch.
The analyst considers that reclaiming this level would signal a trend reversal for the cryptocurrency. This zone corresponds with the horizontal level that started the February-March run to ETH’s yearly high of $4,090.
As of this writing, ETH has seen a positive price jump, currently trading at $2,431. This performance represents a 4.3% surge in the daily timeframe.
Featured Image from Unsplash.com, Chart from TradingView.com
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