Whales Are Not Dumping ETH. They Are Derisking Smartly
The market narrative has it that smart money is out of $ETH . But on the behavior of the chain is another matter. Whales not panicking selling into weakness. They are paring down their exposure, but not selling their core holdings. There is a huge difference between leaving a position and risk management.
Instead of transferring $ETH to exchanges in huge amounts for the purpose of selling, a lot of big holders are transferring assets to cold wallets. That is long term storage - not distribution. At the same time there are those that are hedging strategies using derivatives to hedge the downside volatility, without having to sell their spot holdings.
Staking activity is also continuing to increase. Large wallets are locking $ETH in order to earn a yield, that is showing long term confidence in the network. If whales thought that the structure would fail, they would not make capital commitments to staking. They would be on the offensive when it comes to reducing exposure.
Capital is also spinning in the DeFi liquidity strategies. Rather than sitting on the sidelines and waiting, smart money is making money in the sideways market. This is how the experienced participants manage to survive choppy phases. They work, defend and await their opportunity.
When whales derisk instead of dump, it usually means that they are expecting volatility, not failure. Strong hands are making sure that the risk is taken care of before phases of expansion. The real question is whether ETH is dead? The question is whether or not there is smart money quietly positioning for the next big move or not?
