The Federal Reserve (FED) lowering interest rates is Favourable Information! Ethereum Whales are increasing their holdings by 1 million ETH, on-chain data suggests a big pump is on the way.

Following The Federal Reserve (FED)'s decision on September 18 to drop interest rates by 25 basis points, Ethereum (ETH) on-chain data has issued a series of strong bullish signals. Multiple key indicators show that institutional investors are actively positioning themselves in preparation for a possible pump.

Whales Accumulate: 1 Million ETH Quietly Added to Their Holdings

(Source: CryptoQuant)

According to the latest data from CryptoQuant, Ethereum investor sentiment is gradually leaning towards a bullish scenario, a shift supported by multiple positive factors: a change in The Federal Reserve (FED)'s monetary policy, an increase in net buying demand from large holders, a significant cooling of market sell-off pressure, a substantial increase in stablecoin supply, and a notable recovery in network activity.

The most striking thing is that addresses holding 10,000 to 100,000 ETH (commonly referred to as “whales”) have increased their holdings by up to 1 million ETH since the beginning of September, bringing their total holdings to an astonishing 21.39 million ETH. It is worth noting that this large-scale accumulation trend coincides with retail investors taking profits and a small amount of selling, indicating a divergence of opinions among market participants.

Accumulated wallet hits an all-time high

During the same period, the accumulated wallets (addresses with no selling history) recorded an inflow of 4.1 million ETH. In just half the time, this figure approached the record of 4.5 million ETH reached by accumulated wallets in August, setting a new all-time high for Ethereum. This data indicates that long-term holders' confidence in Ethereum is significantly increasing.

The sell-off pressure has sharply decreased, and the supply of stablecoins has increased significantly

(Source: CryptoQuant)

As demand increases, the market sell-off pressure has sharply decreased. A report from CryptoQuant shows that based on the 7-day moving average, the amount of ETH deposited in the market has plummeted from 1.8 million on August 15 to only 783,000, the lowest level since July. This indicator is often seen as a leading indicator of potential sell-off pressure.

At the same time, since mid-August, the supply of USDT on the Ethereum network has increased by 11 billion USD, reflecting the abundance of “dry powder” in the context of interest rate cuts by The Federal Reserve (FED). On-chain activity also shows positive signs, with active addresses and transaction volume rebounding significantly after a sharp drop in mid-August.

The market faces critical issues

However, despite the on-chain indicators being generally bullish, the price of Ethereum has remained relatively stable over the past three weeks - this aligns with the usual cyclical downturn in the cryptocurrency market from August to September.

The key question is: after the Federal Reserve drops interest rates, will the on-chain recovery be sufficient to reignite market risk appetite, or will the market face the familiar “good news sell-off” pattern?

Technical analysis: Bulls and bears are in a tug-of-war at key levels

(Source: Trading View)

According to Coinglass data, in just the past 24 hours, the Ethereum futures market has seen liquidations amounting to as much as $95.4 million, with $67.9 million coming from long positions and $27.5 million from short positions, reflecting the high volatility of the market.

ETH is currently trying to bounce back from the 20-day simple moving average (SMA), after pulling back slightly below its historical high point last Saturday. If it fails to hold this level, the price may drop to the support level near the 50-day simple moving average, corresponding to $4,300-$4,400, where investors have accumulated about 1.7 million ETH in recent weeks. In the face of increasing selling pressure, the psychological barrier of $4,000 will become a key defensive point.

On the other hand, the technical indicators overall show a bullish trend:

· RSI remains above the neutral 50 level and shows an upward trend

· The Random Oscillator has broken through the bullish channel.

· The trading volume distribution shows strong buying support

If this momentum is consolidated, ETH is likely to challenge its historical high again in the coming days, with the expectation of reaching new highs supported by the macro environment of the Federal Reserve dropping interest rates.