Whale Activity During Ethereum’s Decline
Ethereum’s recent drop below the $4,000 support level has triggered significant whale activity across major cryptocurrency platforms. Over the past two days, analytics firm Lookonchain reported that 15 separate wallets received approximately 406,117 ETH, valued at around $1.6 billion. These transactions originated from prominent exchanges and institutional platforms including Kraken, Galaxy Digital, BitGo, and FalconX.
This accumulation pattern suggests that large holders view the current price decline as a strategic buying opportunity rather than a bear market signal. The timing is particularly interesting given that Ethereum had dipped 1.84% in the past 24 hours, trading at $3,943 at the time of writing. Some analysts interpret this whale activity as a bullish signal, indicating confidence in Ethereum’s long-term prospects despite short-term volatility.
Market Sentiment Diverges on Price Movement
The market reaction to Ethereum’s decline has been notably divided. On one side, traditional financial commentators like economist Peter Schiff have declared that Ethereum has entered a bear market, pointing to the 20% drop from its August record high. Schiff’s comments reflect broader concerns among some analysts about potential further declines.
However, crypto-focused analysts present a different perspective. Analyst Cas Abbé suggested that “you’ll get one more opportunity to load on ETH” and noted that institutional buying may follow the current whale accumulation. This divergence in opinion highlights the different timeframes and strategies employed by various market participants.
Long-Term Holder Behavior Patterns
Analyst Darkfost identified a specific pattern in the accumulation activity, focusing on “accumulator addresses” that have conducted at least two transactions of minimum ETH amounts without performing any sells. These addresses, which Darkfost associates with long-term holder behavior, added nearly 400,000 ETH in a single day during the recent decline.
The scale of this activity reached historic levels on September 18, when these accumulator addresses absorbed approximately 1.2 million ETH. Darkfost noted that this represents “a historic first for Ethereum” and suggested some addresses might be linked to entities offering ETH ETFs, which have seen increased demand recently.
Leveraged Traders Face Significant Liquidations
While whales accumulate, leveraged traders have experienced substantial losses. Data from Coinglass shows that over the past 24 hours, 246,601 traders were liquidated across the cryptocurrency market, totaling $1.13 billion. Ethereum accounted for the majority of these liquidations at $409.6 million, with over $365 million coming from long positions.
The largest single liquidation was a $29.12 million ETH-USD order on Hyperliquid. Darkfost observed that Ethereum experienced one of its sharpest declines in Open Interest since the start of 2024, following a wave of liquidations that cleared out overleveraged positions.
This reset in leverage might actually create conditions for market stabilization. Historically, such liquidations often follow periods of excessive leverage that push Open Interest higher. Once these positions are cleared, selling pressure tends to ease, potentially setting the stage for recovery.
Market strategist Shay Boloor offered an interesting perspective, noting that despite investor panic over the dip below $4,000, major financial figures including Tom Lee, Stanley Druckenmiller, and Peter Thiel have shown support for Ethereum. Boloor also pointed to the US government’s potential need for stablecoins to support treasury demand, with most stablecoin supply sitting on Ethereum.
The combination of whale accumulation, institutional interest, and the clearing of leveraged positions suggests that the current market conditions might represent a strategic entry point rather than the beginning of a sustained bear market. However, the short-term volatility remains significant, and market participants will be watching upcoming economic indicators and institutional flows closely for further direction.
