Major Ethereum Holders Capitalize on Market Weakness

Ethereum CRYPTO000ETH

As the year draws to a close, Ethereum faces a critical test at the psychologically significant $3,000 level, with its technical chart picture showing clear signs of strain. Beneath the surface of declining retail participation, however, a starkly different narrative is unfolding. Sophisticated investors and institutional entities are leveraging the ongoing price correction to accumulate substantial holdings, with some employing high-risk leveraged strategies.

On-chain metrics reveal a notable divergence in market behavior. While the number of active addresses has slumped to an annual low, indicating waning interest from smaller investors, major holders are actively buying. The asset is currently trading at $2,930.59, having posted a modest weekly decline. In contrast, institutional portfolios are expanding significantly. The prominent Ethereum treasury firm, Bitmine, has reportedly crossed a new milestone, now holding in excess of four million ETH. Data indicates the company added approximately 100,000 ETH to its reserves in the last week alone. Similarly, the investment firm Trend Research has increased its holdings by more than 46,000 ETH since the beginning of November. This accumulation by deep-pocketed investors during a price dip suggests a strategic bet on an impending market reversal.

Aggressive DeFi Strategies Emerge

The decentralized finance (DeFi) sector is witnessing particularly bold maneuvers from so-called "whales." Blockchain data from December 24 captured one such transaction, where a large investor withdrew nearly 41,000 ETH (valued at roughly $121 million) from the Binance exchange. These funds were subsequently deployed into the Aave V3 protocol to borrow stablecoins, which were then used to purchase more Ethereum. This practice, known as "looping," allows participants to dramatically increase their exposure. Market analysts caution that such highly leveraged positions could trigger cascading liquidations if key support levels are breached.

Underlying Market Pressures Persist

Despite this background accumulation, the broader market environment remains challenging. One source of "mechanical" selling pressure emerged from treasury company ETHZilla, which divested over 24,000 ETH late in the month to meet financial obligations linked to convertible bonds. Furthermore, capital is being diverted from the primary ETH market; notable figures like Arthur Hayes have been observed shifting funds into DeFi governance tokens. This activity compounds the pressure from disengaged retail traders.

For market participants, the situation is coming to a head. The $2,900 zone is widely viewed as the final defensive line for bullish sentiment. A decisive break below this level could accelerate selling, while a sustained recovery above $3,020 would be needed to improve the short-term technical outlook. The immediate future likely hinges on whether the institutional buying power can continue to absorb the available supply.