On-chain data shows the Ethereum whales have been participating in constant distribution for the last six months, a sign that’s not ideal for ETH.

Ethereum Accumulation Trend Score Has Been Red For Cohorts As A Whole

As analyst James Van Straten pointed out in a new post on X, the Accumulation Trend Score has been showing a grim picture for Ethereum recently. The “Accumulation Trend Score” here refers to an indicator from Glassnode that tells us whether the investors of a given asset are accumulating or not.

This metric takes into account for not just the net balance changes happening in the wallets of the investors, but also the size of the entities. This means that larger entities have a higher weight in the indicator. When the value of the score is close to 1, it means either the large investors are participating in strong accumulation or a large number of small holders are buying. On the other hand, it being close to 0 implies net distribution is going on in the network or at least, there is a lack of accumulation taking place.

In the context of the current topic, the version of the Accumulation Trend Score that’s of interest is the one for the individual cohorts. Addresses have been divided into these groups based on the balance that they are carrying.

Now, here is a chart that shows the trend in the Ethereum Accumulation Trend Score for the different cohorts over the past year:

The value of the metric appears to have been red for most of the cohorts recently | Source: @btcjvs on X

As displayed in the above graph, the Ethereum Trend Accumulation Score showed a shade of blue across the cohorts during the early parts of the year, implying the investors as a whole were participating in some degree of accumulation.

Shortly after the Bitcoin all-time high (ATH) back in March, however, the investors started aggressively selling, with the indicator’s value taking a deep red color (that is, very close to the zero mark). Since the initial sharp distribution, selling has calmed down over the last few months, but the metric has still been tending towards being red. Of note, the 100 to 1,000 BTC, the 1,000 to 10,000 BTC, and the 10,000+ BTC groups are still in a phase of distribution.

These cohorts are popularly referred to as, in the same order, sharks, whales, and mega whales. Investors of this size can carry some degree of influence in the market, so their participation in consistent selling over the last six months or so is naturally not a good sign for Ethereum.

It’s possible that until the various cohorts return back to accumulation mode, ETH won’t be able to make any significant recovery.

ETH Price

At the time of writing, Ethereum is floating around $2,400, down more than 7% over the last seven days.

Looks like the price of the coin has been moving sideways over the last few days | Source: ETHUSDT on TradingView

Featured image from Dall-E, Glassnode.com, chart from TradingView.com

Ethereum is at a critical juncture after failing to break above the $2,500 mark yesterday, leaving investors uncertain about its next move. As the broader crypto market anticipates a rally, Ethereum traders closely monitor signs of strength within the network. Despite recent price struggles, there are promising signals from the blockchain.

Key data from IntoTheBlock suggests a growing demand for ETH staking, reflecting long-term confidence in the network’s future. This surge in staking activity indicates that investors are still optimistic about Ethereum’s potential, particularly with upcoming developments like staking rewards and network upgrades.

However, the recent price action has raised concerns, as many had expected ETH to climb higher by now, especially following a period of positive sentiment across the market.

With the crypto market poised for a possible rally, Ethereum’s next moves could set the tone for broader market performance. Investors are now watching closely to see if ETH can regain momentum or if it will continue to struggle at current resistance levels. The coming days will be pivotal in determining whether ETH can break through and initiate a sustained upward trend.

Ethereum Staking Signals Long-Term Confidence 

Ethereum is trading below a key resistance level as the broader crypto market prepares for a potential rally in the coming weeks. The market sentiment has been increasingly bullish, with investors expecting Ethereum to play a crucial role in the next upward move.

According to key data from IntoTheBlock, 28.9% of all ETH is now staked, a significant increase from the 23.8% recorded in January. This surge in staking activity is a clear indicator of growing long-term confidence in the Ethereum network.

Interestingly, over 15.3% of Ethereum has been staked for over three years, showing that many investors are committed to holding their ETH for the long haul. This strong staking activity reinforces the narrative that ETH is viewed as a valuable asset in the evolving crypto landscape and that many investors are betting on its long-term success.

The recent increase in staking and Ethereum’s upcoming network upgrades suggest that ETH is well-positioned for a potential surge. As market fundamentals continue to improve, the entire crypto market seems poised for a rally, and ETH could lead the charge. If ETH breaks past its resistance levels, the momentum could trigger a significant upward movement in the weeks ahead.

ETH Testing Supply Levels

Ethereum is trading at $2,434 after failing to break above the 4-hour 200 moving average (MA) at $2,458. This technical level has acted as a significant resistance point, and bulls need to reclaim it to maintain upward momentum.

A key target for Ethereum’s price action is surpassing the 4-hour 200 MA and breaking above the 200 exponential moving average (EMA) at $2,511. Doing so would strengthen the bullish case and open the door for a potential rally.

However, if ETH continues to struggle and fails to break past these critical resistance levels, a deeper retracement could be on the horizon. In such a scenario, the next significant demand zone lies around $2,150, which could provide a solid foundation for a potential rebound.

With Ethereum investors closely watching these levels, the price action in the coming days will be crucial in determining whether ETH can regain its bullish momentum or face further downside risks. Bulls must reclaim key technical indicators or risk losing control of the trend, leading to a retest of lower support zones.

Featured image from Dall-E, chart from TradingView

Ethereum bulls might struggle for momentum at press time, but other onchain data points to interesting developments. While ETH is trading above $2,400 but capped by determined sellers, IntoTheBlock data shows that nearly 30% of all circulating ETH has been staked.

Over 34.4 Million ETH Staked In 9 Months

As of October 8, IntoTheBlock analysts note that 28.9% of all ETH has been staked. At this level, more holders are committing to tie their stash. The figure is up, rising from 23.8% recorded in January 2024. More than 15.3% of ETH has been staked out of this amount for over three years.

Related Reading: Dogecoin Preparing For Another Monumental Surge, New All-Time High Incoming?

Ethereum switched the proof-of-work consensus algorithm in September 2022, officially transitioning to a proof-of-stake network like Cardano. The migration permitted the platform to do away with energy-intensive miners who were replaced by validators.

Parallel data from Ethereum shows that over 1 million network validators have cumulatively locked in more than 34.4 million ETH. Each validator earns an APR of 3.3%, a non-compounding annual yield that falls depending on the amount locked.

All network validators must lock at least 32 ETH and operate a node that ensures the network operates every day of the week without downtime. There are penalties for validators who collude to, for example, confirm invalid transactions or attempt to take over the chain in a majority attack.

That Ethereum is attracting more validators despite prices contracting from Q1 2024 highs of around $4,100 to as low as $2,100 in early August is an endorsement of the platform’s long-term prospects.

Presently, Ethereum remains the second largest platform after Bitcoin and the only other crypto project after Bitcoin to get the node for a spot ETF from the United States SEC. Even so, ETH remains under pressure below $2,800, dashing hope.

EIP 7781 Seeks To Boost Ethereum Scalability

Beyond this, Ethereum developers continue to build, looking to enhance user experience and improve scalability. After the Dencun upgrade in March 2024, a new Ethereum Improvement Proposal (EIP) 7781 was recently floated.

The proposer seeks to further boost Ethereum’s processing speeds by reducing slot times and increasing the blob capacity. Specifically, the goal is to eventually reduce the slot time from around 12 seconds to 8 seconds, which could increase the transaction throughput by over 30%.

If this proposal goes through, decentralized exchanges, including Curve or Uniswap, would benefit. Of note is that users, due to higher throughput, will see the cost of mainnet transactions shrink. Although the proposal is welcomed, solo stakers must acquire new gear and strengthen their internet connections.

Feature image from Canva, chart from TradingView