After a pretty good performance in April, Ethereum price has reversed almost all of its recent gains over the past month. Although it crumbled under the weight of the bears heading into the weekend, the altcoin finally found a support cushion just above $2,000 early Saturday. However, the Ethereum token appears to be attracting the attention of a special group of investors despite its disappointing performance over the past few weeks.
Buy the push with ETH smart money
In a recent post on social media platform While the headlines focus on the Ethereum ETF’s big outflows and ETH losing support at $2,200, smart money investors remain active in the market.
According to Alpharactal, smart money refers to the group of investors who own the largest non-exchange positions in a particular cryptocurrency, in this case ETH. Using the Smart Money Flow Index, the analytics firm found that this particular group of investors has accumulated more Ethereum tokens over the past few days.
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Additionally, Alfaractal also shared that smart money began bridging ETH to hyperliquid and base on a scale during the price drop on May 14th. The market intelligence platform has revealed that a group of investors are changing their positions in the ETH market rather than selling their assets.
Source: @Alphractal on X
Alpharaktal pointed out that this behavior was last observed in October 2023, before the price of Ethereum soared 173% from $1,500 to $4,100. According to recent on-chain data, these smart money investors have been “net long” for 9 out of the past 12 days.
The analysis company resolved as follows:
This is why single indicator papers fail on ETH. ETF outflows alone look bearish. Smart money flows alone look bullish. When you add these things together, the situation becomes clear. Retail and ETF allocators sell for less than $2,200. The cohort that has actually moved ETH in the last two cycles is buying ETH.
In the end, AlphaRactal concluded that while ETFs and retail investors are reducing their holdings, Ethereum’s smart money is buying on the bullshit, a divergence that could yield over 100% returns if history is anything to go by.
Ethereum price overview
As of this writing, the price of ETH is around $2,113, reflecting an increase of over 2% in the past 24 hours. The second-largest cryptocurrency remains down about 3% on the week, according to CoinGecko data.
The price of ETH on the daily timeframe | Source: ETHUSDT chart on TradingView
Featured image from iStock, chart from TradingView
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