What It Means For ETH Price?

According to an analysis from on-chain analytics firm CryptoQuant, the total Ethereum (ETH) amount in accumulation wallets has surged to over 19 million.

Ethereum Accumulation Continues To Surge

The analysis shared by verified CryptoQuant analyst, Burak Kesmeci, indicates that more than 19 million ETH is now held by the so-called “accumulation addresses.” In January 2024, these addresses held about 11.5 million ETH.

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The rapid increase in ETH held by accumulation addresses suggests that sophisticated investors may anticipate a rally in the digital assets market toward the end of the year.

Kesmeci highlighted that the amount of ETH held in these addresses has almost doubled and might rise above 20 million ETH by year end. Several factors contribute to this high level of ETH accumulation.

First, the approval of Ethereum-based exchange-traded funds (ETFs) earlier this year by the US Securities and Exchange Commission (SEC) gave the much-sought regulatory clarity and approval to the second-largest cryptocurrency by reported market cap. The analyst explains:

Regulations boosted confidence, making Ethereum mainstream. It’s no longer just for tech enthusiasts – institutions and individuals see it as a key part of the financial future. I expect these addresses to hold over 20 million ETH by the end of the year. With Ethereum priced around $4,000, the total value will surpass $80 billion, making these accumulation addresses as valuable as some of the world’s largest companies.

As of October 18, 2024, US-based ETH spot ETFs hold total net assets worth $7.35 billion, representing almost 2.3% of Ethereum’s market cap. In the last week, ETH spot ETFs attracted $78.9 million in net inflows after two consecutive weeks of net outflows.

70% Of ETH Holders In Profit

Data from IntoTheBlock shows that 70% of ETH holders are in profit, while 28% are in loss and 2% are at breakeven. 

Further, 74% of current ETH holders have held the digital asset for over a year, while 23% have held it for over a month but less than a year. These factors indicate that investors are not eager to part with their ETH holdings anytime soon.

A majority of profitable holders may lead to increased buying pressure, potentially driving ETH prices higher. However, many holders realizing profits could also result in selling pressure, creating volatility.

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The case for heightened ETH volatility is strengthened by the recent sharp rise in open interest for the digital asset. Some crypto analysts are confident that ETH will re-test some of its crucial resistance levels before further upside movement.

For instance, crypto analyst Carl Runefelt recently opined that if ETH breaks the $2,640 resistance level, it could initiate a significant price rally. ETH trades at $2,663 at press time, down 2.4% in the past 24 hours.

Featured image from Unsplash, Chart from Tradingview.com