A significant divergence is emerging in the Ethereum market, where large-scale investors are increasing their holdings while retail participants are selling off. This trend, combined with a rise in spot trading volumes and an upcoming network upgrade, suggests a potential shift in market dynamics and renewed institutional interest.

Whale Activity Signals a Potential Market Shift

Since late April, data from CryptoQuant reveals a stark contrast in investor behavior. Whales, defined as wallets holding between 10,000 and 100,000 ETH, have expanded their positions by 52%, adding a total of 7.6 million ETH. During the same period, retail investors holding 100 to 1,000 ETH have decreased their collective holdings by 16%.

According to Shawn Young, chief analyst at MEXC Research, this pattern of large wallets absorbing sell-side liquidity from smaller holders often signals a local market bottom. The observation is further supported by a spike in spot market trading volumes recorded in early November when Ethereum’s price dipped to $3,000. Such activity is frequently seen before a major trend reversal or a new consolidation phase.

Additional indicators point to Ethereum’s underlying strength. The ETH/BTC ratio has remained stable at multi-month lows, and daily transactions on the network have increased by 25% since September. Young believes these factors are building a strong foundation for the asset.

Fusaka Upgrade Aims to Boost Scalability

Growing optimism is also tied to Ethereum’s Fusaka upgrade, scheduled for December 3. This major update is designed to enhance scalability and significantly lower transaction costs by introducing dedicated data lanes for rollups. The change will directly benefit Layer 2 protocols, enabling them to process transactions faster and more cheaply.

Analysts suggest the upgrade is a critical step for Ethereum’s mainstream adoption, particularly within the decentralized finance (DeFi) sector. By improving the network’s capacity to handle complex applications, the Fusaka update could attract more institutional players to build on the platform.

The upgrade will also introduce Peer Data Availability Sampling, a technical improvement that allows network nodes to verify data by sharing smaller segments. This reduces bandwidth and hardware requirements, lowering the barrier to entry for network participation and strengthening decentralization.

As the market watches these developments, analysts believe that if the current accumulation trend holds, Ethereum could establish a consolidation range between $3,000 and $3,400, providing support for future growth. At present, Ethereum is trading at $3,560.

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