3 min read
Ethereum’s outlook is flipping increasingly bullish as whale cohorts ramp up their accumulation during the recent crypto market correction, with experts hinting at a bright future ahead for the second-largest crypto as institutional inflows pile up.
According to on-chain analysis platform Santiment, whales holding between 1,000 to 100,000 ETH tokens increased their holdings by 14% in the past five months. During that period, Ethereum outperformed Bitcoin, with ETH delivering returns of 132% versus BTC’s 34% gains.
In the past 24 hours, Ethereum's price is up 0.9% and is currently trading at $4,422, according to CoinGecko data.
“Whale portfolio rebalancing from BTC into ETH is fueling Ethereum’s momentum, supported by rising interest in its ecosystem and upcoming ETF prospects,” Ryan Lee, chief analyst at Bitget, told Decrypt.
The sharp accumulation from whales aligns with $9.9 billion in netflows to the Ethereum chain noted over the past three months, per Artemis data, and $6.7 billion in stablecoin inflows in the past week, according to Token Terminal.
The inflow of investors and capital reflects the robustness of Ethereum's DeFi and network activity, experts told Decrypt.
“Ethereum’s role has strengthened again, with a clear trend of activity moving back from L2s to the Mainnet, especially in DeFi,” Alexander Zahnd, CEO of Zilliqa, told Decrypt. “For me, Ethereum is the natural go-to blockchain for institutional use because of its maturity, security, and development team.”
Exchange-traded funds are playing a key role in Ethereum’s bullish feedback loop, reflected in ETH ETF netflows since August.
Ethereum’s inflows tower over Bitcoin’s, with $3.87 billion in August and $1.08 billion last week, compared to Bitcoin’s outflows of $751.12 million in August and inflows of $440.71 million last week. The last three days, however, have seen significant outflows for Ethereum ETFs, adding to the uncertain short-term outlook due to growing macroeconomic concerns.
The broader optimism and positive sentiment surrounding Ethereum are largely driven by accumulation from the digital asset treasury.
Ether Machine raised $654 million on September 2, following $800 million in financing, including a $741 million contribution of 169,984 ETH from Co-Founder and Chairman Andrew Keys.
The macro environment supports this bullish outlook, said Lee, arguing that, “The anticipation of a Federal Reserve rate cut in September strengthens risk-on sentiment, creating favorable conditions for digital assets.”
Speaking to Decrypt, Andrew Melville, head of research at crypto derivatives analytics platform Block Scholes, argued that “ETH and all altcoins with a DeFi ecosystem are well-positioned to take advantage of the positive regulatory stance in the U.S. because they have an ecosystem that stands to benefit from regulation.”
Despite Ethereum’s short-term macroeconomic risks, Tom Lee, BitMine chairman and Fundstrat’s Chief Investment Officer, referred to ETH’s four-year consolidation or base as the most “compelling opportunities into year-end,” in Fundstrat’s Macro Minute on September 2.
Based on Wyckoff’s methodology, Lee expects a breakout from the ongoing base to trigger a massive upside for Ethereum. “The bigger the base, the bigger the breakout,” Lee said, noting that the previous base catalyzed a 54x gain for ETH. This time, he said, “I don’t know if it’s 54x, but again, just look at the base and the breakout.”
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