Ethereum: Whales Sell At A Loss Amid Mixed Signals and Bullish Network News

Note: This is an AI generated insight from Arkham's proprietary AI: ULTRA. The content has been edited and verified by one of Arkham’s Editors before being published. To access the insight directly, go to the Insights page on the Arkham Intel Platform.

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The ETH market is currently experiencing a complex interplay of bearish on-chain whale activity and mixed sentiment in derivatives, in contrast with potentially bullish fundamental news. Two whale addresses have been offloading substantial amounts of ETH to centralized exchanges at a loss, contributing to a notable increase in selling pressure. 

This on-chain bearishness is reflected in some derivatives markets, with long-dated futures trading at a discount and an increased demand for put options. However, other derivatives indicators, such as a positive funding rate outlier on Deribit and increased demand for call options, suggest a divided market sentiment. Amidst this, news of a potential ETH gas limit increase points to ongoing network improvements and efficiency, which could be fundamentally bullish for ETH in the long term.

Whale Selling Pressure

Two prominent whale addresses have initiated significant outflows of ETH to centralized exchanges, likely indicating a strong selling intent. 0x5CE3...E68aBe transferred a total of 1,350 ETH worth $3.94M to Kraken across three transactions. This whale realized a substantial loss of approximately $5.29M on their ETH holdings, selling into a declining market. 

Similarly, 0x6620...5eD377 transferred 900 ETH with a $2.56M to HTX, incurring a loss of approximately $1.24M. These actions suggest a potential trend of loss-cutting and increased selling pressure from large holders, coinciding with a period of declining ETH prices from over $3.3K on December 10th to below $2.9K on December 17th.

Mixed Derivatives Sentiment

Derivatives markets for ETH are exhibiting mixed signals. Long-dated derivatives are trading at a discount, indicating a bearish outlook among institutional investors. Options data shows a negative outlier in delta skew and forward implied volatility, suggesting increased demand for put options and a bearish sentiment. Conversely, there's also a positive outlier in ATM implied volatility and forward implied volatility, indicating increased demand for call options and a bullish sentiment. 

Furthermore, while ETH perpetual funding rates on Deribit and Bybit show negative outliers, implying traders are paying to be short, a positive outlier in the perpetual funding rate on Deribit suggests some traders are paying to be long. This divergence highlights uncertainty and a lack of clear directional consensus in the short-term market.

Increased Market Activity and Open Interest

A significant volume surge on Binance for ETH indicates heightened market activity and potential volatility. Concurrently, a positive outlier in the rate of change of open interest on Arkham suggests increased speculative activity. These metrics, particularly the volume spike, align with the observed whale transfers and price movements, indicating that market participants are actively reacting to current conditions and positioning themselves, contributing to the overall dynamic and somewhat volatile environment.

Bullish Network Development News

Despite the bearish on-chain and mixed derivatives signals, recent news regarding ETH's network development presents a potentially bullish long-term outlook. Reports of a potential ETH gas limit increase to 80 million in January could improve transaction speeds and network efficiency. 

Additionally, news of ETHGas raising $12M and Vitalik Buterin highlighting on-chain gas futures indicate growing interest and innovation in gas optimization and market efficiency. These fundamental improvements could enhance the network's scalability and user experience, potentially attracting more users and developers. Read our full guide to the Ethereum ecosystem in 2025 here.