April was a pretty eventful month for Ethereum. When the world’s second largest cryptocurrency registered its latest ATH, the asset saw over 40 percent growth over the month. However, as has been shown in the last 24 hours, price corrections were also quick to enter the market. ETH appears to have lost nearly 10 percent of its value in the past 24 hours and is now trading close to the $ 2.2,000 price level.
While most investors are convinced of the long-term prospects for ETH, the coin appears to be remarkably vulnerable to Bitcoin’s price. However, it is also important to examine whether other factors inherent in the ETH ecosystem contributed to the recent price correction.
Over the past day, the decline in ETH was quite noticeable. The asset traded at a high of $ 2661 yesterday and has since fallen below the $ 2264 support, which has turned into a strong resistance level. The data provided by Santiment highlighted the strong run ETH had when it breached its previous ATH. In this context, one factor is striking that determined the price: They are the whales of ETH.
Large accounts have always been vital in the crypto ecosystem. It was no different at ETH. As the coin rose from around $ 1,500 in late March to its April peak, large accounts have consistently taken the asset off the exchanges and presumably put it in private offline wallets.
Santiment noted that addresses above 10,000 ETH have been quite active during this time span and may have been a major contributor to the leading altcoin’s upward momentum over the month.
Interestingly, in the past few days, Glassnode also reported that USD transaction fees for Ethereum’s chain in the chain rose to levels that were the second highest in the history of the coin a few days ago. On-chain fees were $ 47.3 million per day, approaching the ATH registered on Feb.21 of over $ 48 million.
While whale accounts can be kingmakers from time to time in terms of price developments and uptrends of the coin, it also results in a heavy concentration of the asset in fewer hands.
While coins like ETH don’t necessarily have a problem with adoption, the concentration of tokens on whale accounts can also lead to a huge increase in the volatility of the coin. While volatility can also help move the coin up, ETH’s correlation with BTC is a limiting factor.
The ETH continues to have a high correlation with the king coin. As can be seen over the past 24 hours, in the event of a price correction, the ETH will reflect the BTC and can also amplify the price decline if large accounts come under market pressure and cause panic sell-offs.
In the long term, however, the fundamentals of ETH seem to be giving the coin some solid support. According to Glassnode, the total value of the deposit contract of ETH 2.0 continues its trend from 2021 and reaches another ATH.
Despite these short-term price corrections, ETH continues to enjoy great confidence among its investors and was able to navigate the bear markets with minimal losses. While this is likely to continue, fewer price corrections and lower milled concentration may allow the coin to see greater price discovery after its current ATH and keep it immune to immediate withdrawals.
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