Whale Buying Supports Ethereum as Institutional Demand Fades

Ethereum has declined nearly 4% to around $2,400 as the cryptocurrency market reacts to the failure of the CLARITY Act in the US Senate and growing expectations of a Federal Reserve interest rate hike. The drop has led some investors to short ETH perpetual futures and sell spot Ethereum, but whales have been quietly buying up the selloff.

The data suggests that larger holders are absorbing supply released by smaller retail sellers, which could eventually support Ethereum's price. Wallets holding between 10k-100k ETH added approximately 200k ETH to their collective balances over the past week, while exchange reserves have been declining for five consecutive days.

Despite this, institutional demand has decreased, with US spot Ethereum ETFs recording $142.30 million in net outflows on Tuesday. The FedWatch tool shows that markets assigned a 92.3% probability to a 25-basis-point Federal Reserve rate increase at the upcoming meeting.