Lookonchain data on February 20 sample that an ethereum whale and one of the early investors who participated in the 2014 Initial Coin Offering (ICO) cashed out when prices briefly surpassed $3,000.
eth whale breaks out at $3,000: bullish or bearish?
Prior to today's liquidation, on-chain data shows that the whale, which acquired 3,465 eth for approximately $10.30 during the ICO, remained dormant for 8.6 years. Each token was then available for $0.31.
However, the whale came back to life when prices briefly surpassed $3,000 during the initial New York session on February 20. The address, Lookonchain, notes, transferred 1,732 eth, worth approximately $5.15 million at current prices, to Kraken, a cryptocurrency exchange. When the whale came out at around $3,000, the return on investment stood at more than 9,600 times.
The transfer, as expected, remains a source of discussion and speculation. Given that ethereum posted stellar gains recently, the move was possibly a profit-taking event. Still, considering that massive transfers to centralized exchanges are a bearish signal, $3,000 can be interpreted as local resistance.
This assumption may be valid because despite recent strong rallies, eth bulls have failed to break above $3,000. The last time buyers trended in this zone was in early 2022. Then, it was after the correction from the all-time highs of around $5,000 recorded in 2021 and before the crash that forced the coin to fall below $1,000 at the end of 2022.
Since then, eth prices have more than doubled, surging in 2023 and maintaining gains in early 2024. It remains to be seen if the bullish trend will continue in the coming months, marked by eth exploding above $3,000 at $5,000.
ethereum dominates DeFi, preparation for Dencun upgrade
eth traders are overly optimistic about what lies ahead. Most cite network dominance as an enabler of decentralized finance (DeFi) and other on-chain activities, including the minting of non-fungible tokens (NFTs). DefiLlama data ethereum” target=”_blank” rel=”noopener nofollow”>sample that over $76 billion in assets are managed by various DeFi protocols led by Lido Finance, a liquidity staking platform.
In addition to the popularity of ethereum, the network upgrades are also positive developments. So far, developers are preparing for the deployment of Dencun on the mainnet. The update introduces proto-danksharding, a critical step before fragmentation.
Through sharding, ethereum plans to scale up the chain by dividing the network into interoperable “shards” that can process transactions. In this model, the network will process more transactions at once, allowing the platform to host even more intensive protocols.
Featured image from Canva, TradingView chart
