Crypto Whales Make Strategic Altcoin Purchases Amid Market Decline in Early September 2024
In the initial week of September 2024, the cryptocurrency market experienced a significant slowdown in trading activity, leading many investors to adopt a cautious approach. This trend is evident in the 5% decrease in global cryptocurrency market capitalization observed over the past week.
Despite this downturn, large-scale investors, commonly referred to as crypto whales, are seizing the opportunity to acquire altcoins at lower prices. Notable purchases this week include Polygon (POL), Ethereum (ETH), and the meme coin Pepe (PEPE).
On September 4, Polygon successfully completed the migration of its native token from MATIC to POL at a 1:1 ratio. Following this migration, whale activity surged, with the number of wallet addresses holding between 100,000 and 1,000,000 POL increasing by over 90%. Currently, these POL holders consist of 33 addresses that collectively control 5% of the altcoin's total circulating supply.
Although the migration event was initially perceived as a “sell the news” scenario, the number of POL whales continues to rise. These investors remain undeterred by the lackluster price performance, with POL trading at $0.38 at the time of writing.
Ethereum has encountered substantial resistance at the $2560 price point this week, yet this has not deterred large holders from increasing their positions. Recent data indicates a 38% increase in net flow among these holders over the past week, signaling a bullish trend. Large holders are defined as whale addresses that possess over 0.1% of an asset’s circulating supply, and their net flow reflects the balance between purchases and sales over a designated timeframe.
If Ethereum experiences a broader accumulation trend, it could potentially break through resistance levels and trade at $2868.
Additionally, the demand for the Ethereum-based meme coin PEPE has surged among crypto whales in the past week. According to data from Santiment, the number of addresses holding between 1 million and 10 million PEPE has reached a record high of 69,000, marking a 1.2% increase over the last seven days. This uptick suggests that large investors are actively increasing their PEPE holdings.
The accumulation of PEPE has been encouraged by a favorable buy signal derived from its Market Value to Realized Value (MVRV) ratio. Currently, this on-chain metric, calculated using a 30-day moving average, stands at -5.67%. When the MVRV ratio is below zero, it indicates that the asset is undervalued, suggesting that its current price is lower than the average price paid for all circulating tokens. This scenario often presents a prime opportunity for investors looking to capitalize on market dips.