On-chain analytics reveal that Ethereum whales have been consistently engaged in distribution over the last six months, a trend that doesn’t bode well for the price of ETH.
Ethereum’s Accumulation Trend Score Signals Distress Across Cohorts
As analyst James Van Straten highlighted in a recent post on Twitter, the Accumulation Trend Score has painted a bleak picture for Ethereum lately. This “Accumulation Trend Score,” as defined by Glassnode, is an indicator showing whether investors are accumulating or distributing their holdings in a particular asset.
This metric accounts for not only the net balance shifts in investors’ wallets but also considers the size of the entities involved. Larger entities carry more weight in this indicator. When the score approaches 1, it suggests either strong accumulation by large investors or significant buying activity among small holders. Conversely, a score nearing 0 indicates net distribution is occurring within the network, or at the very least, that accumulation is lacking.
For this discussion, the relevant version of the Accumulation Trend Score pertains to individual cohorts. Addresses have been categorized into these groups based on their respective balance sizes.
Here’s a chart illustrating the trend in the Ethereum Accumulation Trend Score across various cohorts over the past year:
The chart reveals that the Ethereum Accumulation Trend Score exhibited hints of blue across cohorts in the early part of the year, indicating a period of collective accumulation among investors.
However, following Bitcoin’s all-time high (ATH) in March, a sharp wave of selling ensued, causing the indicator to plunge into deep red (very close to the zero mark). Although selling pressures have subsided in recent months, the metric continues to lean towards red. Notably, the cohorts defined as 100 to 1,000 BTC, 1,000 to 10,000 BTC, and 10,000+ BTC remain entrenched in a distribution phase.
These groups are commonly referred to as sharks, whales, and mega whales, respectively. Given that these sizable investors can significantly influence the market, their ongoing selling activity over the past half-year is understandably a troubling sign for Ethereum.
It is likely that ETH will struggle to mount a substantial recovery until these various cohorts revert to an accumulation phase.
Current ETH Price
As of this writing, Ethereum’s price hovers around $2,400, reflecting a decrease of over 7% in the past week.
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