Ethereum concluded March 2024 with a closing price of $3,646.8, marking a modest 11.8% growth for the month. Recent observations among ETH whale investors suggest a potential catalyst for a promising start to April.
The month of March began on a positive note for Ethereum, but encountered challenges in sustaining momentum following the deployment of the Dencun Upgrade on March 13. However, recent trends indicate a shift in sentiment among investors, potentially paving the way for a bullish trajectory in April.
Following the Dencun upgrade, a notable sell-off ensued, with strategic swing traders capitalizing on the news and large stakeholders adopting precautionary measures to address potential network disruptions. This resulted in a 13% dip within a week of the upgrade.
Nevertheless, market data trends reveal a resurgence in optimism among investors over the past two weeks. Notably, data from Santiment illustrates a significant increase in Ethereum supply held by the top 10,000 wallet addresses since March 20. These wallets have collectively acquired 860,000 ETH, valued at approximately $3.1 billion, after offloading 30 million ETH in the aftermath of the Dencun Upgrade.
While the recent acquisitions represent only a fraction of the ETH initially sold by whales in mid-March, the sustained buying activity is poised to influence market sentiment positively for two primary reasons. Firstly, whale investors wield considerable influence on price action, potentially signaling a recovery phase to retail investors and new entrants. Secondly, the longer investment horizon typically associated with whale investors may result in a significant portion of the recent purchases being withheld from the market supply in the near term.
Additionally, on-chain metrics indicate a decline in the readily available ETH supply across exchanges. Cryptoquant’s exchange reserves metric highlights a persistent drop-off in active ETH market supply since the resurgence of whale buying activity on March 20. This reduction, totaling 363,000 ETH, translates to over $1.3 billion worth of liquidity withdrawn from ETH spot markets over the last two weeks.
In light of these developments, Ethereum appears poised for a potential breakout above $4,000 in April 2024. However, immediate resistance is anticipated around the $3,700 mark, as indicated by IntoTheBlock’s global in/out of the money chart. Should Ethereum price surpass this resistance, supported by the recent whale acquisitions and decreased market supply, further upward movement towards new highs is likely.
Conversely, a reversal in the crypto market bull rally could see Ethereum face downward pressure, particularly if prices fall below $3,200. Nevertheless, proactive defensive purchases from investors who acquired ETH at an average price of $3,484 may mitigate significant downturns below the $3,500 threshold.
