Speed Bumps Ahead: Ethereum Whales Are Unloading ETH Onto Exchanges Pre-Merge

Speed Bumps Ahead: Ethereum Whales Are Unloading ETH Onto Exchanges Pre-Merge

2 min read

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As the clock ticks down for the Ethereum network’s upcoming Merge upgrade, now scheduled for September 15, the largest holders of Ethereum’s native token, Ether (ETH), are spooking the market with a troubling trend.

According to recent data from crypto analytics firm Santiment, ETH holdings in the 10 largest exchange-based addresses have grown over 78% over the past three months while holdings in the top non-exchange addresses declined by 11%. 

For those of you not totally across the concept of exchange ‘in-flows’ and ‘out-flows’, as a rule of thumb, the flow of digital assets onto exchanges is generally considered to be bearish for the price of the asset, because it means investors and traders are getting ready to sell. 

The combination signals that some major players in the ecosystem may be getting ready to sell their ETH closer to the Merge. 

The Merge

Santiment clarified more of the technical details in a related tweet.

The Merge is undoubtedly the most hotly debated topic in the crypto space today, with a host of experts firmly entrenched on opposite sides of the discussion. 

One of the strongest voices on the ‘up only’ side of the debate is Bitmex CEO Arthur Hayes, who penned an article titled “ETH-flexive”, in which he explained why he thinks the upgrade will see the price of ETH accelerate to $5000 by May next year.

ETH triple halving

According to Hayes, the Merge will induce a “triple-halving” event for ETH which will see the token become hyper-deflationary and highly sought after. 

“The rate at which Ether is issued per year will be reduced by ~90% under the new PoS model… ETH taken out of circulation will only increase as the network grows in popularity… all of these factors should drive the price of ETH up exponentially.”

Standing in stark contrast to this is crypto investment commentator Jason Pizzino, who sees the current negative price action and movement of ETH by whales as “obviously negative” signs for the long-term price of Ether. In a tweet, he told his followers that ETH’s current price action is exactly what a “classic sell the news event” looks like.

Prominent trader CryptoKaleo called out the bears to his 550k followers on Twitter, saying that it’s still “way too early” to jump to conclusions about a “sell the news”-style event. 

Regardless of the price action surrounding the event, a successful Merge will signal the completion of phase two of the Ethereum network’s transition to a faster, more environmentally friendly Proof-of-Stake chain.