- While a few whales are dumping ETH following its recent price decline, exchange supply data shows most investors are bullish.
- Hong Kong spot Bitcoin and Ethereum ETFs underperform issuers’ expectations on the first day of trading.
- Ethereum liquidations have exceeded those of Bitcoin.
Ethereum (ETH) experienced a further decline on Tuesday following a disappointing first-day trading volume for Hong Kong’s spot Bitcoin and ETH ETFs. This comes off the back of increased long liquidations and mixed whale activity surrounding the top altcoin.
Read more: Ethereum erases weekend gains as yearlong SEC investigation comes to light
Daily digest market movers: Whale activities, Hong Kong’s ETH ETFs, liquidations
Ethereum’s decline has triggered increased long liquidations in the past 24 hours. Here are key market movers for the largest altcoin:
- Asset manager Grayscale transferred 5,626 ETH worth $17.83 million to liquidity provider Flow Traders on Tuesday, according to data from Lookonchain. Grayscale has transferred ETH to Flow Traders four times in the past three months, totaling 23,178 ETH worth $71.3 million.
- While a few whales may be selling in the short term, Glassnode data reveals ETH’s exchange supply has declined and is dropping even faster than Bitcoin. This aligns with several whale activities in the past three weeks as exchanges like Binance have experienced massive ETH withdrawals. Hence, most investors may be holding on to Ethereum with the expectation of a rally in the long term.
Glassnode: Ethereum’s exchange supply drops faster than Bitcoin’s. Investors hoard ETH for the long haul, predicting a bullish surge. Ethereum set to dominate the altcoin rally!
Focus on the big picture, not short-term noise. pic.twitter.com/sJMcpx2jP2
— Kyledoops (@kyledoops) April 30, 2024
- Founder of Tron blockchain Justin Sun, who has been linked with several whale ETH purchases since March, shared his thoughts on the Ethereum staking and restaking boom.
He shared that restaking and staking protocols have made significant progress and will spin off into operating entities to support blockchain networks worldwide. Several crypto community members highlighted that this may be the reason for his potential ETH buying spree in the past weeks.
Also read: Bitcoin, Ethereum Spot ETF in Hong Kong sees underwhelming response with $12 million in trade volume
- Despite high projections by issuers for Hong Kong’s spot Bitcoin and Ethereum ETFs, they underperformed widely, bringing in a total trading volume of about $12 million on their first day. This is barely a pinch compared to the $4.6 billion first-day trading volume of Bitcoin ETFs—383 times higher than that of Hong Kong.
- Following ETH’s further decline on Tuesday, its liquidations have exceeded Bitcoin’s for the second consecutive day on Tuesday. Ethereum has seen a total of $91.76 million in liquidations compared to Bitcoin’s $68.51 million. The market decline is hitting hard on ETH long traders, who have experienced $73.62 million in liquidations.
ETH technical analysis: Key level could prove strong to prevent further decline
Ethereum saw another day of increased decline as prices slipped below the $3,000 key level on Tuesday. Considering the market has been waiting on a price trigger since the week began, the disappointing trading volume of Hong Kong’s spot BTC and ETH ETFs caused the sharp decline.
Also read: Ethereum cancels rally expectations as Consensys sues SEC over ETH security status
While short-term price movement indicates more decline, exchange withdrawals from long-term bulls could be a strong support to prevent a decline below the $2,852 key level.
ETH/USDT 4-hour chart
Hence, if ETH fails to break below this level, it may bounce up to fill up recent market inefficiencies. ETH’s recovery from this descent could see it break past the $3,300 key level to tackle inefficiencies at the $3,454 level formed on April 12. This thesis may be invalidated if a key macro event significantly affects the crypto market.
Bitcoin, altcoins, stablecoins FAQs
Bitcoin is the largest cryptocurrency by market capitalization, a virtual currency designed to serve as money. This form of payment cannot be controlled by any one person, group, or entity, which eliminates the need for third-party participation during financial transactions.
Altcoins are any cryptocurrency apart from Bitcoin, but some also regard Ethereum as a non-altcoin because it is from these two cryptocurrencies that forking happens. If this is true, then Litecoin is the first altcoin, forked from the Bitcoin protocol and, therefore, an “improved” version of it.
Stablecoins are cryptocurrencies designed to have a stable price, with their value backed by a reserve of the asset it represents. To achieve this, the value of any one stablecoin is pegged to a commodity or financial instrument, such as the US Dollar (USD), with its supply regulated by an algorithm or demand. The main goal of stablecoins is to provide an on/off-ramp for investors willing to trade and invest in cryptocurrencies. Stablecoins also allow investors to store value since cryptocurrencies, in general, are subject to volatility.
Bitcoin dominance is the ratio of Bitcoin’s market capitalization to the total market capitalization of all cryptocurrencies combined. It provides a clear picture of Bitcoin’s interest among investors. A high BTC dominance typically happens before and during a bull run, in which investors resort to investing in relatively stable and high market capitalization cryptocurrency like Bitcoin. A drop in BTC dominance usually means that investors are moving their capital and/or profits to altcoins in a quest for higher returns, which usually triggers an explosion of altcoin rallies.
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