Why smart money is accumulating ETH even as traders warn of a drop

One of the most often discussed topics in the cryptocurrency sector is the Ethereum merger, and analysts have a variety of opinions on how the shift to proof-of-stake (PoS) will affect Ether’s (ETH) price.

The ongoing accumulation of Ether by whale wallets was detailed in a deeper study from cryptocurrency research firm Jarvis Labs, which revealed the following chart comparing the percentage change in whale wallet stockpiles to ETH price.

Ether whale holding change. Source: Twitter

The dots’ colors represent the price of Ether: as the chart shows, whale wallets began reducing their holdings at $4,000 and did not begin to reacquire until after the price fell below $2,300. Jarvis Labs said: “Whales are continuing to accumulate Ether, their accumulation remains in sideways-to-uptrend.”

And it’s not just the whales that are interested in buying Ether on the dip, as shown by the following chart, which depicts red dots indicating that both whale wallets and smaller wallets have seen a rise in accumulation.

Ether divergence. Source: Twitter

Analysts at Jarvis Labs said: “Looking at just the Ether wallets distributions, it can be inferred that Whales UP + Fishes UP (Both whales and Fishes seem to be accumulating). Merge narrative?”

Analysts at Delphi Digital pondered whether the price of Ethereum might decouple from Bitcoin (BTC) throughout or after the merger. The altcoin is predicted to “likely to see more consolidation for ETH/BTC in the short run.”

ETH/BTC price trends. Source: Delphi Digital

One of the key issues this graph raises is what it will take for Ether to break away from “the invisible chain” that has kept it bound to Bitcoin for so long. According to Delphi Digital, current bullish “ultrasound money” and “merge” sentiments regarding Ether may be just what the doctor ordered in order for Ether to break free from its link with Bitcoin price movement.

“The interest in ‘post-Merge’ Ether is only going to grow stronger from here, especially as more people see the chance to earn higher real returns denominated in a deflationary asset,” according to Delphi Digital.

Despite the fact that Ether’s price keeps going down, the number of ETH staked on the Beacon Chain is growing. Dune Analytics data also reveals an increase in deposits to Eth2, and several experts have weighed in on how institutional investors and whales might trade Ether before and after the Merge.

Lido Eth2 deposits. Source: Dune Analytics

Overall, the data reveals that even if Ether’s price is 42.5% away from its all-time high, the wise money continues to accumulate because to the expected hike in staking reward percentage and the hope that once Ether becomes a deflationary asset, the price will turn up.

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