Small Ethereum Investors Increase Exposure As ETH Loses $ 4,000

The native Ethereum Ether token ( ETH ) fell more than 18% after hitting an all-time high around $ 4,867 on November 10, now trading near...


The native Ethereum Ether token (ETH) fell more than 18% after hitting an all-time high around $ 4,867 on November 10, now trading near $ 3,900. Nonetheless, the plunge did not deter retail investors from buying the token in small amounts.

According to To data collected by Glassnode – a blockchain analytics platform, the number of Ether addresses holding less than or equal to 0.01 ETH hit a record high of 19.95 million on December 4, the day ETH fell to $ 3,575 (data from Coinbase).

Ethereum addresses with balances less than or equal to 0.01. Source: Glassnode

Meanwhile, the number of Ethereum wallets with balances of at least 0.1 ETH also continued to increase despite the correction of Ether from $ 4,867 to $ 3,575, eventually reaching a new all-time high of 6, 37 million on December 12.

As a result, the number of Ether addresses with a non-zero balance also hit a new record high of nearly 70 million on December 12. In contrast, addresses holding less than or equal to 1 ETH fell alongside prices, indicating that they were less interested in buying Ether session drops.

Ethereum addresses with balances less than or equal to 1 ETH. Source: Glassnode

Bounce forward?

The army of retail investors buying Ether in small amounts advances as the ETH price drops towards a confluence of support.

Notably, Ether plunged more than 5% to nearly $ 3,900 on Monday in a sell-off inspired by similar corrections in the cryptocurrency space. Nonetheless, the price of ETH has reached an area that has recently attracted buyers.

ETH / USD Daily Price Chart with Confluence Support. Source: TradingView

The first support came from the lower trendline of the descending channel pattern – the blackened range shown in the chart above. Meanwhile, the purple 100-day simple moving average (100-day SMA) and red pullback area – as has been the case since October 20 – have increased the potential for Ether to retrace upward short. term.

While smaller retail investors appear to have amassed some ether, their larger counterparts appear to be in conflict.

Ethereum addresses with balances less than or equal to 1000 ETH. Source: Glassnode

For example, Glassnode data shows a marginal recovery in buying interest by the Ethereum wallets with balances of at least 1000 ETH. Yet overall, their number has fallen from nearly 7,200 to less than 6,350 in 2021.

Trade Ether Balances

Other positive clues come from the declining Ether balances on all crypto exchanges.

The number of coins held by exchanges has fallen from nearly 14 million ETH to 14.13 million ETH since December 9 – which coincided with a price drop of almost 10.50% – but its long term trend remains biased downward.

Ethereum balance on all exchanges against the ETH price. Source: Glassnode

A lower ETH balance between exchanges portends the intention of traders to hold their coins or place them in decentralized funding pools (Challenge) projects to earn returns instead of trading them for other assets.

Related: Data shows professional traders are currently more bullish on Ethereum than Bitcoin

According to data provided by Defi Llama, DeFi’s Total Locked-In Value (TVL) hits a new all-time high of over $ 250 billion, of which Ethereum’s TVL is over $ 180 billion.

Total capital blocked in the Ethereum ecosystem. Source: Lama Challenge

“However, Ethereum’s dominance over DeFi business took a hit in the second half of 2021,” said Delphi Digital, a crypto-focused investment firm, adding that:

“As the multi-chain narrative unfolds, capital has shifted to ecosystems like Solana, Terra, and Avalanche.”

High gas prices have been the main reason investors look for potential ‘Ethereum killers’.

For example, a decentralized exchange swap costs $ 70 on Ethereum but $ 1 on Terra and Solana, although some analysts predict that Ethereum full transition from proof of work to proof of stake next year would solve the problem of the high level of gas.

“The price of Ethereum will increase at a much faster rate than that of Bitcoin, due to the move to proof of stake,” Noted Tom Higgins, CEO of the Gold-i asset management platform.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move comes with risk, you should do your own research before making a decision.