An Ethereum Whale Has Bought 5,000 ETH Again, Is It Time to Follow the Lead?

This is not the first time this whale has used ETH price fall to its advantage. In November 2022, the same entity bought 5,200 ETH at an average of $1,322 per ETH.

An Ethereum whale has recently purchased about 5,000 ETH, which is around $11.46 million, at what seems to be a local support level.

This is not the first time this whale has used ETH price falls to its advantage. In November 2022, the same entity bought 5,200 ETH at an average of $1,322 per ETH. It was sold in December 2023 and January 2024 at an average of $2,093, making a total profit of $4.2 million within a year.

A smart whale bought 5,000 $ETH($11.46M) at the bottom again in the past 2 days!

The whale bought 5,200 $ETH at an average price of $1,322 in November 2022.

Then sold it at an average price of $2,093 in January, December 2023, and January 2024, making more than $4M!…

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These accumulations at lower price levels usually show that big investors, or whales, have a favorable view of the asset in the long term. For the retail investor, such a movement may attract their attention as it indicates the whale’s belief in future price appreciation.

Trading by whales has been a significant signal of market mood for many years. Large investors who come into an asset deploy a lot of capital and more to the point, and they do so with a lot of analysis and proper planning. At times, their actions can signal future trends in the prices.

Nonetheless, this does not mean the retail trader should jump in because, as discussed, whales do not always lead to an upward trend. Still, with 5,000 ETH bought at the recent bottom, one may ask if it is time to do the same.

Ethereum’s Weekly Performance: Still Down 6%

However, the whale’s purchase of Ethereum is still showing a 6% decline in the current week. The crypto market has been volatile recently due to prevailing macroeconomic uncertainties, such as inflation and increased interest rates, which affect risk assets, including cryptos. Ethereum has been unable to keep up the pace, especially when breaking through essential barriers.

ETH trades at $2,309.22, reflecting a 1.51% rise in the last one day. This short-term relief is, however, still a far cry from the recent highs that Ethereum has seen. At the time of writing, the cryptocurrency’s market capitalization is slightly under $278 billion, and the 24-hour trading volume is $12.92 billion.

The following statistics indicate some improvement in the trading activity as the volume has risen by more than 35% in the last day. Nevertheless, the market sentiment remains slightly bearish, especially when looking at Ethereum’s price action in recent days.

Further, Ethereum remains a victim of several factors, such as the unclear stance of the U.S regulatory environment, the slow growth of Ethereum Layer 2 scaling solutions, and competition from other Layer 1 blockchains such as Solana and Avalanche. Also, Ethereum’s 6% decline over the week indicates that the investors are still in the bearish zone despite a whale buying large amounts.

Analyzing ETH Price: Signs of Recovery Amid Downtrend

Analyzing the 4-hour chart of Ethereum, one can see that the price has been going down since August 15th. This is with the Alligator indicator currently pointing to the downside and the asset trading below key moving averages, such as the Alligator’s moving averages.

Still, Ethereum has failed to overcome this bearish pattern characterized by a series of lower highs and lower lows, thus indicating that the price is a downtrend.

But, there are signs of improvement. ETH price, which recently tanked, has been trading in a narrow range around the $2300 level, and the support is at the $2299.90 level. The Alligator indicator always has the three lines of the 13, 8, and 5-period moving averages.

The chart shows that the lines are starting to converge to suggest that the market is preparing for a potential trend reversal. The traders use the Alligator’s mouth as one of the indicators when it closes, i.e., When the three lines meet, look for signs of the downtrend weakening.

Here’s What Technicals Say

The Volume Oscillator, which measures the volume difference between the two periods, shows a decline of 11.77% in the last several sessions. Lower volume may indicate market consolidation as traders await a more adequate signal of further price movement. This might seem like a lack of aggressive action

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