Are whales a major threat to the price of Ethereum (ETH)?

Ethereum (ETH) continues to struggle below the psychological $2,000 mark, a level it has not been able to regain since March 28, as bearish momentum remains on both technical and on-chain indicators.

Despite stabilization efforts, recent data shows that the concentration of ETH in whale wallets is increasing, along with the weakening of trend indicators such as the EMA line.

At the same time, retail holders are gradually losing market share, causing ownership to shift towards larger players. The combination of decreasing participation from retail investors and increasing dominance of large whales may make ETH increasingly susceptible to sharp corrections if sentiment reverses.

The amount of ETH held by whales reaches a 9-year high, raising concerns about centralization

The amount of ETH held by whale addresses, wallets controlling more than 1% of the total circulating supply, has reached its highest level since 2015, at 46%.

This marks a significant change in the ownership data of Ethereum, as whales have surpassed the holdings of retail investors on March 10 and continue to increase their market share.

Meanwhile, investor addresses holding between 0.1% and 1% of the supply, and retail wallets holding less than 0.1%, both experienced a fall in market share.

The increase from 43% to 46% in just a few months reflects a strong accumulation trend from the largest holders, indicating that the concentration of the ETH network is increasingly rising.

ETH allocation by different wallet types | Source: IntoTheBlock.Whales often represent investment organizations, funds, or early adopters, and their behavior can significantly impact prices due to the volume of assets they control.

Investor-level addresses often reflect individuals with high net worth or smaller organizations, while retail addresses include traders and holders participating in the network on a daily basis.

Although some may view the increase in whale holdings as a positive signal, it also raises the risk of sudden volatility if large holders start to panic sell.

With the participation of investors and retail sales gradually falling, the market may become more fragile and vulnerable to strong, unexpected price fluctuations created by a few large players.

Whales holding 1,000 to 100,000 ETH currently control 59 billion USD

The analysis of the ETH supply distribution matrix shows concerning signs of concentration.

When excluding addresses holding more than 100,000 ETH, typically associated with centralized exchanges, whale addresses holding between 1,000 and 100,000 ETH currently control around 59 billion USD worth of ETH, accounting for approximately 25.5% of the circulating supply.

This group has been accumulating an increasing supply of the network, consolidating the power shift to large entities operating outside exchanges, but still has the potential to exert a significant influence on the market.

Recently, Galaxy Digital moved 100 million USD in Ethereum, raising questions about whether this is a strategic shift or a signal of a sell-off.

ETH Supply Distribution Matrix | Source: IntoTheBlockWhile some view this trend as a strategic positioning of confident holders, it also exposes Ethereum to significant bearish risks.

With more than 1/4 of the supply concentrated in the hands of whales, any coordinated or panic sell-off could lead to a significant price fall, especially in an environment where retail participation is weakening.

Rather than being a sign of long-term stability, this level of concentration could make the ETH market increasingly fragile and susceptible to volatility if large holders begin to shift their capital into other assets.

The bearish EMA structure puts pressure on ETH

The EMA lines of Ethereum continue to flash bearish signals, with the short-term moving average still below the long-term moving average, indicating that the downward momentum is still ongoing.

If a new correction occurs, Ethereum may first test the support level of $1,535. Falling below this level will open the door for a deeper drop to $1,412 or even $1,385.

If these support levels cannot be maintained, Ethereum will approach the $1,000 mark, a level that some analysts have marked as a potential bearish target in the event of a prolonged market correction.

ETH price analysis | Source: TradingViewHowever, the possibility of a reversal of the bullish trend may still occur. If buying pressure returns and Ethereum regains short-term momentum, it could test the resistance level at $1,669.

A breakout above this level will be an important technical signal, potentially pushing ETH towards $1,749 and even $1,954.

However, with the EMA still leaning towards bearish, the burden still rests on the bulls in the future.

You can see the price of ETH here.

Disclaimer: This article is for informational purposes only and is not investment advice. Investors should conduct thorough research before making any decisions. We are not responsible for your investment decisions.

Viet Cuong