Ethereum’s 26% surge fuels run to $2.5K after whales dump 1.7M ETH — $3K next?

Ethereum’s largest whale wallets holding over 1000 ETH trimmed off 1.7M coins in the last three months. 

According to Santiment, this whale cohort’s overall holdings dropped from 58.64M ETH to 56.91M ETH between May and August. This translated to a 2.9% fall. Notably, the mega whale holdings across exchanges and staking contracts also slipped from 7.07M ETH to 6.54M ETH. 

Interestingly, the wallet category holding 1 to 10 ETH surged to over 4.5% of the circulating supply over the same period. This suggested that retail was actively accumulating during the Q2 drawdown. 

Will staking and ETF demand push ETH above $3K?

Here, it’s worth noting that staked ETH jumped from 39M coins to a record 42.3M coins, or a 35% staking ratio. In other words, demand from staking and retail players was steady despite the headwinds in Q2. 

The staking demand has been crucial in easing the sell-off driven by the U.S Spot ETH ETF in Q2. That said, since July, the Spot ETH ETF complex has become a net buyer.

This week alone, the products have hauled in record inflows of over 34K ETH. The last time such ETF demand was seen was last October, just before the flash crash. 

Collectively, this has sent ETH’s price soaring by 26% this week to $2.5K. Effectively, it has reversed all Q2 losses after dipping to $1.5K in June. Reclaiming $2.5K might just set the pace for the next leg of the recovery. 

In fact, sophisticated players across the Options market have been positioning themselves for a similar scenario.

In the last 24 hours, the top traded volume was calls (bullish bets) eyeing $2500 for the end-of-August expiry. For the middle and the end of September Option expiries, bullish bets were concentrated at $2900 and $3000. 

Perhaps the most notable positioning was at $2000, which had the highest put volume (bearish bets). This meant that institutional players expected $2000 to be the new ETH floor price with a potential upside move towards $2.5K or $3K by late August or September. 

However, there is only a 12.5% chance of ETH hitting $3K by next month. If the bets are validated, that would mark a 2x move (100% rally) from the June low of $1.5K. 

Final Summary

• Large whale wallets with over 1000 ETH have trimmed their exposure by 2.9% since May.
• Institutional players have been betting that ETH’s recovery could 2x to $3K by September.