Ethereum experienced a brutal correction on September 25, briefly pushing the Ether price below the important $4,000 support area. While this drop wiped out billions in market capitalization and led to widespread liquidations, it also triggered a massive Ether whale accumulation, signaling that large investors view this as a major opportunity to buy.
Market Volatility and Large Liquidations
The sudden price plunge triggered a series of liquidations in the market. The largest casualty was one trader, 0xa523, who had their whole 9,152 ETH long position (worth $36.4 million) liquidated. This event alone represented combined losses of over $45 million for the trader.
At the time of writing, ETH is struggling to regain its footing, trading at about $4,030 and 12% down on the week. This bearishness has also spilled over into spot Ether ETFs, which have seen net outflows of $296 million this week.
Ether whale accumulation Started
However, the most intriguing story is taking place behind the scenes. Whales went shopping as prices fell. Data indicates that ten freshly created wallets accumulated a staggering 201,000 ETH on the morning of September 25th, worth approximately $855 million.
This kind of aggressive Ether whale accumulation is typically an indicator that smart investors believe the asset is nearing its bottom.
Exchange Reserves Hit Historic Lows
Supporting this bullish forecast is a steep decline in ETH holdings on centralized exchanges. On-chain data from Glassnode shows that exchange reserves have dropped to just 14.8 million ETH, a level last seen in 2016. That’s a 20% drop since mid-July.
Similarly, CryptoQuant data displays the exchange supply ratio hitting a nine-year low. Essentially, less ETH is being offered for sale, which can remove selling pressure and clear the way for a price explosion once demand returns.
Analysts Remain Bullish on Long-Term Outlook
Despite the short-term volatility, the majority of analysts are overwhelmingly bullish in their long-term prognosis. Prominent strategist Ted sees a path for ETH to reach $10,000 in this cycle, citing $3,800 as an area of good accumulation. Tom Lee of BitMine Technologies is even more bullish, calling for a move to the $12,000-$15,000 range by year-end.
Since ETH is still trading about 18% below its all-time high, this Ether whale buying on a dip could very well be the catalyst for a robust bounce in the coming months.
