Q4 Ethereum: New Data on Whale Activity and ETF Fund Outflows

Ethereum is experiencing its most challenging period in the fourth quarter in seven years. On-chain data analysis reveals intense whale activity and unprecedented capital outflows from American exchange-traded funds, which explains the current challenges faced by the leading altcoin.

Massive Whale Deposits Threaten Market Stability

On-chain transaction tracking devices indicate that an entity known as 1011short recently transferred 112,894 ETH to a major digital trading hub. This transaction, estimated at a value of $332 million, signals a warning that market observers are paying close attention to. The whale mentioned in the analysis also holds open short positions on Bitcoin, Ethereum, and Solana, with a total value of $749 million.

The current market position of this entity results in unrealized losses of around $49 million at current price levels. Depositing such amounts on the main trading platform typically signals preparation for mass sell-offs, especially considering the available liquidity there.

Institutions Accumulate While the Market Sells

Contrasting with whale activities, a strategy adopted by Trend Research stands out. This investment entity has been steadily increasing its Ethereum holdings over the past month. By the end of December, it acquired an additional billion dollars in stablecoins from a lending protocol, allowing it to further strengthen its position. The current holdings of this entity amount to 601,074 ETH, approximately $1.8 billion at market value.

This contradiction between whale actions and the strategy of large investment funds illustrates deep divisions in market sentiment.

Fourth Quarter Saw the Largest Losses Since 2019

Ethereum declined by 28.8 percent over the past three months, marking the worst performance for this calendar period in six years. October and November were particularly severe, although downward pressure persisted through December. The entire cryptocurrency sector lost over one trillion dollars in the same timeframe.

An additional factor weighing on Ethereum is capital outflow from investment products based on this asset. In the last month of the year, American ETF funds recorded a net outflow of $1.42 billion — a record high. In December alone, such products saw withdrawals of $612.6 million, ranking as the second-largest sell-off in the history of these instruments.

Future Outlook

Despite current difficulties, some sector experts maintain forecasts of Ethereum potentially rising to $8,500. Such a forecast remains conditional on stabilizing sentiment in the US markets, which currently serve as the main source of downward pressure not only on Ethereum but on the entire cryptocurrency ecosystem.