As Ethereum (ETH) experiences a price correction and dips below the $4,000 threshold, major investors, commonly known as “whales,” are actively purchasing the cryptocurrency.
This price decrease has created conflicting opinions within the crypto community. Some experts are predicting a potential bear market, while others view the price drop as a perfect chance to increase their long-term holdings of Ethereum.
Ethereum: Whale Activity Increases Despite Market Concerns
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Recent data from BeInCrypto Markets indicates Ethereum’s price has slipped by 1.84% in the last 24 hours, trading below $4,000. Currently, the altcoin’s value is around $3,943.
Recent analysis by BeInCrypto suggests a shift towards a bearish outlook for Ethereum, potentially leading to further price declines. Prominent economist Peter Schiff, a known critic of cryptocurrency, has even stated that Ethereum has officially entered a bear market.
“Ethereum has fallen below $4,000. Despite significant purchasing by the Ethereum Treasury, this major cryptocurrency is now in a bear market, down 20% from its high in August. Bitcoin is likely next,” Schiff commented.
However, this negative view is not shared by many large crypto investors, who are taking advantage of the lower prices to buy more Ethereum.
The analytics firm Lookonchain reported that over the last two days, 15 different wallets have received a total of 406,117 ETH, worth approximately $1.6 billion, from leading exchanges and financial institutions, including Kraken, Galaxy Digital, BitGo, and FalconX.
“You will have another chance to accumulate ETH. Whales have already begun buying, and soon large organizations will follow,” analyst Cas Abbé stated.
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This purchasing behavior is supported by increasing inflows to addresses associated with accumulation, indicating that major Ethereum holders are strategically buying during this price dip. According to analyst Darkfost, these accounts are defined as wallets that have completed at least two transactions involving a minimum quantity of ETH without ever selling any.
“We can confidently say that these types of addresses represent long-term investment behavior,” the analyst observed.
Recent activity shows that nearly 400,000 ETH were added to these specific wallets in just one day. Furthermore, on September 18th, these addresses set a new record by accumulating roughly 1.2 million ETH.
“This marks a historical first for Ethereum. It’s clear that some major players are serious, and these addresses might be linked to entities offering ETH ETFs, which have recently seen a surge in demand,” Darkfost added.
Moreover, this behavior is consistent with the growing optimism that the current ETH price dip represents a good buying opportunity. In a recent post on X (formerly Twitter), Altcoin Gordon suggested that ETH is approaching a long-term accumulation zone, anticipating price increases by December.
“ETH is entering my long-term buy zone. Buy at these levels, and you will thank me in December,” he tweeted.
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Market strategist Shay Boloor argued that while the Ethereum drop below $4,000 is causing panic among some investors who are calling it a bear market, the larger context suggests otherwise. He noted that influential financial figures like Tom Lee, Stanley Druckenmiller, and Peter Thiel have all expressed confidence in Ethereum, even with the recent decline.
“Additionally, the U.S. government requires stablecoins to support the demand for treasuries. A significant portion of that supply relies on ETH. This seems like an opportunity under $4,000,” Boloor said.
Ethereum’s Price Drop Impacts Traders Using Leverage
The overall market downturn has significantly impacted traders using leveraged positions. Data from Coinglass indicates that in the past 24 hours, 246,601 traders across the cryptocurrency market were liquidated, resulting in a total of $1.13 billion in losses.
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Ethereum accounted for the majority of these liquidations, totaling $409.6 million, with over $365 million from traders who had taken long positions. The single largest liquidation was an ETH-USD order on Hyperliquid worth $29.12 million.
Darkfost pointed out that Ethereum is experiencing one of the most significant declines in Open Interest since early 2024, caused by a wave of liquidations that wiped out overly leveraged positions.
The largest drop occurred on Binance, where over $3 billion was liquidated on September 23rd, followed by another $1 billion yesterday. Meanwhile, Bybit and OKX reported decreases of $1.2 billion and $580 million, respectively.
“Historically, these resets often follow periods of excessive leverage that drive Open Interest upwards, as was the case for ETH, which had attracted significant market attention. Once liquidations accumulate and reduce Open Interest, the selling pressure tends to lessen, creating conditions for the market to stabilize and potentially even recover,” he explained.
In conclusion, while the short-term market may experience volatility, the combination of accumulation by large holders and positive market indicators suggests the current dip could be a precursor to a future upward trend. Market participants will be closely watching upcoming economic data and institutional investments for further insights into Ethereum’s future price movement. The cryptocurrency remains below its all-time high, but strategic purchasing indicates underlying strength.