Key Points
- Four institutional investors, including whales, sold off Ethereum holdings, causing a price drop.
- The Mean Dollar Invested Age (MDIA) and network growth metrics suggest Ethereum could be undervalued.
Four major investors, including institutional whales, sold off some of their Ethereum (ETH) holdings as the altcoin’s price dropped.
ETH’s value fell by over 7% in just 24 hours.
Sale Details
Lookonchain data shows that trading firm Cumberland transferred 17,206 ETH to exchanges, which at the time were valued at $57.3 million.
FTX also deposited $8.33 million worth of ETH to Binance.
The other two institutions combined sold ETH worth $39.92 million.
Whales may sell their assets for a variety of reasons, including normal profit-taking or after a cryptocurrency underperforms.
However, it doesn’t seem that ETH falls into the latter category.
The sell-offs significantly impacted Ethereum’s price, which fell to $3,169.
At press time, ETH was valued at $3,262, indicating a slight recovery.
Metrics Analysis
The Mean Dollar Invested Age (MDIA) is a metric that measures the average age of coins held in the same wallet.
An increase in MDIA suggests that many coins are less active and have remained in the same place for a long time.
A decrease in MDIA implies that old coins are moving.
For Ethereum, on-chain data from Santiment revealed that the 90-day MDIA spiked.
Historically, a massive decline in the metric was accompanied by a local top.
The recent increase suggests that ETH could be undervalued, and the latest correction could be an opportunity to buy at lower prices before a potential rally begins.
Network growth is another metric that measures user adoption over time.
On 12 April, Ethereum’s network growth was 128,000, indicating that a lot of new addresses interacted with the project.
However, the price decline caused the number to fall to 36,100.
If network growth improves, demand for ETH might help the price action jump.
Conversely, a decline in the metric could result in stagnancy for the value.
The one-day circulation dropped to 230,000, reinforcing the notion of decreased usage.
The drop in circulation could be good for ETH as it could be a sign of less selling pressure.
Should the number of coins used continue to fall, then ETH’s price might exit the awful state it has been in over the last 24 hours.
