On-chain data shows that ethereum whales have been engaging in a steady distribution for the past six months, a sign that is not ideal for eth.
ethereum Accumulation Trend Score Has Been Red for Cohorts as a Whole
As Analyst James Van Straten noted in a new x.com/btcjvs/status/1843380581847183667″ target=”_blank” rel=”noopener nofollow”>mail On x, the accumulation trend score has recently shown a gloomy picture for ethereum. The “Accumulation Trend Score” here refers to a Glassnode indicator that tells us whether investors in a given asset are accumulating or not.
This metric takes into account not only the net balance changes that occur in investors' wallets, but also the size of the entities. This means that larger entities have a greater weight in the indicator. When the score value is close to 1, it means that large investors are engaging in strong accumulation or a large number of small holders are buying. On the other hand, being close to 0 implies that there is net distribution in the network or, at least, there is a lack of accumulation.
In the context of the current topic, the version of the cumulative propensity score that is of interest is that of the individual cohorts. The addresses have been divided into these groups according to the balance they carry.
Now, here is a chart showing the trend in the ethereum Accumulation Trend Score for the different cohorts over the past year:
<img decoding="async" class="alignnone aligncenter" src="https://technicalterrence.com/wp-content/uploads/2024/10/Ethereum-Whales-Sell-Off-Relentlessly-for-6-Months-Data-Shows.jpeg" alt="bitcoin Accumulation Trend Score” width=”1844″ height=”686″/>
The value of the metric appears to have been red for most of the cohorts recently | Source: x.com/btcjvs/status/1843380581847183667/photo/1" target="_blank" rel="noopener nofollow">@btcjvs on x
As shown in the chart above, ethereum's trend accumulation score showed a blue hue across all cohorts during the early parts of the year, implying that investors as a whole were engaging in some degree of accumulation.
However, shortly after bitcoin's all-time high (ATH) in March, investors began selling aggressively, and the value of the indicator turned deep red (i.e., very close to the zero mark). Since the initial strong distribution, sales have calmed down in recent months, but the metric still tends to be in the red. It is noteworthy that the 100 to 1000 btc, 1000 to 10,000 btc, and 10,000+ btc pools are still in a distribution phase.
These cohorts are popularly known as, in the same order, sharks, whales and megawhales. Investors of this size can have a certain degree of influence in the market, so their participation in constant sales over the last six months is naturally not a good sign for ethereum.
It is possible that until the various cohorts return to accumulation mode, eth will not be able to make any significant recovery.
eth price
At the time of writing, ethereum is trading around $2,400, down more than 7% in the last seven days.
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Looks like the price of the coin has been moving sideways over the last few days | Source: ETHUSDT on TradingView
Featured image by Dall-E, Glassnode.com, TradingView.com chart
