Ethereum Sees $332M Deposit Amidst Growing Scarcity

Ethereum Sees $332M Deposit Amidst Growing Scarcity – Is $3.3K the Next Target?

Ethereum (ETH) has remained relatively stable in a tight trading range for the past week. The cryptocurrency has fluctuated between $2,900 and $3,000, putting it at a critical junction in the market. As of now, ETH is trading at $2,949, which reflects a 2.87% decrease over the last day. With minimal price movement, investors are reevaluating their strategies.

Key Takeaways

Ethereum's trading range is narrowing, hovering around $2,949.
A major whale deposited $332 million worth of ETH, impacting market dynamics.
ETH's scarcity is increasing, with the Stock-to-Flow Ratio (SFR) reaching a two-week high.
Current market trends could lead ETH to potentially hit $3,324, or drop to $2,784, depending on whale activity.

Ethereum Whale Deposits $332 million worth of ETH

Major Whale Activity: $332 Million ETH Deposit

Recently, following a decline from its October peak, whale engagement with Ethereum has surged in December. The Whale Hunter Indicator on TradingView has shown consistent activity during price dips ranging from 3% to 8%.

Ethereum whale hunter Source: TradingView

During this time, whales have taken advantage of rallies to sell, stifling any potential upward movements. This has also resulted in pushing prices down, with retail investors attempting to buy during market strength.

In a notable development, a Bitcoin OG whale, who manages a substantial portfolio worth $749 million, has been adjusting their exposure to ETH. According to Lookonchain, this whale recently transferred 112,894 ETH, valued at approximately $332 million, to Binance. Just a few days prior, they had also moved 100,000 ETH worth around $291 million to the exchange.

BitcoinOG Source: Lookonchain

Despite this significant deposit, the whale has not yet sold these tokens. Such actions often point to preparing for liquidity, suggesting that the tokens might remain untouched for a time. Alternatively, it could hint that they are looking to hedge against their existing positions.

Increasing Scarcity of ETH

Even with the rise in Bitcoin OG deposits, Ethereum’s scarcity has notably increased. The Stock-to-Flow Ratio (SFR) climbed to 47 at the time of reporting, a two-week peak.

This increase in SFR signals a diminished supply for immediate sale, indicating that many market players are accumulating ETH.

Ethereum stock to flow Source: Santiment

A greater scarcity often leads to upward price pressure, especially when demand remains strong, potentially resulting in price growth.

Additionally, Ethereum’s Spot Netflow has recorded a positive reading only five times in the past 30 days. Recently, it has remained negative for the last seven days, dropping to -$10.6 million. This ongoing decrease suggests aggressive accumulation by market participants on exchanges, presenting a bullish indication.

Ethereum spot netflow Source: CoinGlass

Historically, such conditions have greatly favored upward price movements. If demand continues at this pace, ETH might convert the $3,000 mark into support, eyeing a target of $3,324, particularly where whale momentum is observed. Conversely, if selling pressure increases, notably from Bitcoin OG, ETH might break out of its current range and descend to as low as $2,784.

Conclusion

The dynamics surrounding Ethereum continue to unfold, with key whale activity and rising scarcity influencing market conditions. All eyes will be on how the price responds in the coming days as the cryptocurrency navigates this critical junction.