Ethereum’s Rollercoaster: Whales Accumulate Amid Volatility

• Ethereum saw $62M in long liquidations on June 11th amid a sharp price drop, highlighting significant market volatility.
• Ethereum’s options market volume fell by 52%, impacting liquidity and trader confidence, with Open Interest down 2% to $15.73B.
• However, Ether retains its sharpness in 2022, alt amid market headwinds that see exchanges record over $1 billion in outflows and whales amassing 240,000 ET.

Among the top acts, Ether – the second-largest altcoin – has been fluctuating sharply. The dominance of long liquidations reached $62 million by the 11th of June, the highest recording since the 23rd of May. This suggests that a short squeeze was seen, where traders who speculated on the uptrend were compelled to sell after the onset of an adverse downturn in Ethereum price. On the other hand, short liquidation was significantly low, averaging $7 for the period. 3 million increased significantly in an upward direction which indicates strong selling pressure on long-position clients.

The market activity involving Ethereum derivatives has also been significantly lower in the past six months. Specifically, the total trading volume in the altcoin’s options market fell by half, shrinking to $321 million. It might have the effect of reducing trading volumes which may consequently cause low liquidity levels whereby; participants can buy and sell volumes at particular prices.

Further, Ethereum has pulled back in their Open Interest by 2% to $15. 73 billion. Lower levels of commodity prices paired with a decrease in Open Interest point to fewer traders entering a new position, a bet which implies that the market has low confidence.

However, let’s take a look at some of the challenges of using Ethereum; Ethereum’s Funding Rate is still positive at 0. 0069%. A funding Rate greater than zero means there is high demand for Holds or indeed Buys, meaning that some traders believe that the price will increase in the future. This indicates that there is still hope from a group of market players in the market as they keep posting positive results.

Relatedly, a significant amount of outflows has been registered on Ethereum itself, with more than $1 billion of ETH being transferred. Even Coinbase, which has not revealed figures for outflow over the year, recently claimed to have had the largest outflow of ETH at 336 thousand with a value of about a billion. These outflows imply that investors could be withdrawing it into private wallets, possibly for accumulation or to avoid exchange volatility.

From the chart on price movements, Ethereum had its biggest daily downfall in a month on June 11th and fell by about 4%. 6 % which ranges from more than $3,600 to nearly $3,500. However, the price of the weapon has shown some improvements and has risen by more than 1% to be rounded at around $3.500. The 6-day moving average has remained a major support floor at around $3,300.

In an interesting turn of events, whale addresses have been receiving Ethereum despite the changes in its supply. The same data from Santiment pointed towards the number of addresses holding between 10,000 and 100,000 ETH, which has risen from 1,040 to 1,049. As losses mounted, these whales purchased over 240,000 ETH, which is equivalent to approximately $840 million in the present market price range. This cumulatively may demonstrate a long-term bet on the primacy of Ethereum as the ultimate value storage unit.

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