Unlike the rest of the market, Ethereum didn’t experience much decline on December 4th. On that day, it was only down 2.3%. However, the wick he created has succeeded in terrifying all Ethereum investors. The bigger question is how it happened.
Ethereum toppled by institutions
The events of December 4 are credited to multiple reasons however, IntoTheBlock may have figured out the reason individual to Ethereum.
According to the data, institutional investors were responsible for the drop as their volumes suddenly increased by $ 6 billion to reach $ 18 billion.
Before closing at $4124, ETH almost dropped to $3470 that day owing to the huge downside wick. The last time volumes this high were observed was right before Ethereum dropped by 7.73% on November 15.
This is also verified by the fact that these large trading volumes represent 89% of all volumes on December 4, or just over $ 20 billion.
In any case, investors did not let go of this opportunity and rushed to buy the dip. Even investors who were previously inactive suddenly came back and active addresses spiked by 50%
Some of them were ready to buy the drop, however, most of the rest probably were not, as the day after December 4, more than 81,000 ETH worth $ 354 million were sold in stock market according to net flows.
Anyhow, Ethereum investors continue to remain the most profitable, with only 10% of all active addresses facing losses.
Moreover, as more and more addresses join the network, the volume and liquidity of ETH has also increased. Looking at the average balance which had not seen a major drop since September, it’s obvious that ETH investors will continue to rise.
Presently, the bearish momentum seems to be subsiding away as MACD is about to make a bullish crossover above the signal line.
And the rising ADX indicates that the strength of the active trend is strengthening. Since the candles are currently green this could mean that the active trend could turn out to be an uptrend and once the ADX breaks through 25.0 the market could experience a reversal.
