Key Points
- Ethereum’s [ETH] large transactions exceeding $100,000 significantly increased in March.
- The Commodities Futures Trading Commission (CFTC) recently classified ETH as a commodity.
Despite facing crucial events like the Dencun Upgrade, Ethereum [ETH] underperformed in March, registering only a slight increase of 0.79% throughout the month.
The second-largest cryptocurrency encountered a strong resistance at the $4,000 mark and fell to $3,500 at the time of writing.
Whale Transactions and Bullish Sentiments
Regardless of the slump, large investors continued to add Ethereum to their portfolios.
Data analysis from Santiment reveals that transactions worth over $100,000 saw a significant increase during the month.
This resulted in a sharp rise in small whale wallets, typically holding between 1,000 – 10,000 coins.
Known as “buy the dip”, this accumulation strategy involves purchasing assets during temporary price drops to benefit from potential future price increases.
This plan, driven by research and business acumen, is typically adopted for fundamentally strong assets with long-term growth potential.
The bullish sentiment was also reflected in the increasing long exposure in the derivatives markets.
About 72% of the total whale positions on crypto exchange Binance were betting on ETH to rise.
ETH as a Commodity
The bullish strategy adopted by whales seemed to have influenced the broader market.
The general mood was one of “Greed” as per the Fear and Greed Index, leading to FOMO and attracting more investors, thereby increasing buying pressure.
However, the question arises – what was motivating whales to be bullish on ETH?
Recent weeks saw a lot of pessimism surrounding the approval of Ether spot ETFs, with the odds getting lower due to the increasing possibility of the U.S. Securities and Exchange Commission (SEC) deeming Ether as a security.
But the U.S. derivatives market regulator, Commodities Futures Trading Commission (CFTC), recently referred to ETH as a commodity in the KuCoin lawsuit.
This could have revived investors’ hopes that an Ether spot ETF would eventually be approved, which has the potential to do for ETH what Bitcoin has been witnessing since mid-January.
