Seismic Shifts Rock Crypto Market as Long-Term Holders Cash In

In the second week of April, the market witnessed significant adjustments. Glassnode indicators revealed profit-taking and potential market corrections. This article analyzes the activities of funds and whales during this period, highlighting key on-chain data points and providing insights into the market's dynamics.

Seismic Adjustments Rock Crypto Market in the Wake of Long-Term Holder Realization

The second week of April concluded with significant market fluctuations, mirroring predictions based on Glassnode indicators. In this comprehensive analysis, we delve into the intricacies of fund and whale activity during this tumultuous period, shedding light on key on-chain events that shaped market dynamics.

On-Chain Highlights of the Week (April 8 - April 13)

1. Layer 2s Signal Resilience

Despite market volatility, Layer 2 solutions have exhibited resilience, with their aggregate Total Value Locked (TVL) surging by 24.4% over the previous month. Arbitrum One and Base have been instrumental in this growth, contributing significantly to the overall TVL of $8.4 billion.

Ethereum's Dencun upgrade has been a catalyst for Layer 2 adoption, reducing data costs through the incorporation of data blobs. This has resulted in lower transaction fees and gas consumption, fostering increased utilization.

Base, a Layer 2 solution from Coinbase, has witnessed a remarkable rise in bridge volume and transactions per second (TPS) in 2024. Bridge volume has nearly tripled, while TPS has increased tenfold since January.

2. Whales Accumulate Ether (ETH)

Amidst the market correction, a single wallet address has emerged as a substantial ETH buyer, acquiring 10,309 ETH (worth approximately $35.82 million). This follows a previous purchase of 10,643 ETH ($36.75 million) on April 8, just before the BTC price rebound.

Furthermore, large organizations are actively accumulating ETH, as observed by Lookonchain:

• 0xACc7 (speculated to be Matrixport's wallet) withdrew 56,176 ETH ($202.12 million) from exchanges since April 11.
• Investor 0x435 withdrew 3,092 ETH ($11.12 million) from Binance on April 10 and has withdrawn a total of 24,044 ETH ($86.5 million) over three days from April 8.

Earlier this week, two additional significant whales invested a combined $35.11 million to purchase 10,322 ETH. This accumulation is believed to be a concerted effort to push ETH above $3,400. The transactions involved:

• 8 wallets, potentially belonging to a single entity, spent 20.86 million USDT to buy 6,145 ETH at $3,395. The wallets received USDT from 0x065 and 0x8ce, which have transacted ETH and USDT, suggesting a common ownership.
• Whale 0x5e9 purchased 4,178 ETH at $3,410 using 14.25 million DAI. This whale has generated a cumulative profit of $7.48 million from a previous ETH and WBTC trade.

3. Spot BTC ETF Flows in Focus

Grayscale continues to hold a significant position in the BTC market, with its holdings currently at 319,252 BTC (valued at $21.57 billion).

iShares Bitcoin Trust (owned by BlackRock) has maintained its BTC acquisition spree, holding over 266,58 BTC ($18.01 billion) at present.

In contrast, the Spot BTC ETF market has been relatively subdued this week, with most funds exhibiting zero netflow for several days. However, on Friday, April 12, Bitcoin Spot ETF flows turned negative by $55 million, with only BlackRock adding to its BTC holdings while other funds remained inactive.

4. FTX and Alameda Research Resume Asset Sales

After a period of relative quiet, FTX and Alameda Research have resumed asset sales, demonstrating impeccable timing. Ahead of today's market correction, they transferred 2,500 ETH ($8.56 million) to Coinbase at approximately $3,426 per ETH.

Since March 1, FTX and Alameda have transferred 15,850 ETH ($58 million) to intermediary exchanges at an average price of $3,659.

Conclusion

The crypto market has undergone a series of adjustments this week, with long-term investors realizing profits and market fundamentals undergoing recalibration. Layer 2 solutions have shown resilience, while whales and institutions continue to accumulate ETH. Spot BTC ETF flows have been muted, reflecting the market's current volatility. The actions of FTX and Alameda Research, with their strategic asset sales, underscore the dynamic and ever-evolving nature of the crypto ecosystem.