Ethereum volatility spikes after Wintermute’s $160M deposit – ETH rebound possible IF…

Ethereum [$ETH] saw sharp volatility after reclaiming $2,500 and climbing to $2,600 before falling toward $2,400. At press time, it traded near $2,524, up 2.26% daily and 2% weekly.

The pullback coincided with large-holder selling, yet Exchange Supply presented a more complicated picture.

Is Wintermute selling Ethereum?

Lookonchain reported that Wintermute deposited 61,847 $ETH worth $160.3 million into Binance and Coinbase. The transfer raised selling concerns, but an exchange deposit does not confirm a sale.

Market makers regularly move inventory between venues for liquidity provision and operational purposes.

Source: Arkham

If intended for liquidity provision, the transfer may not represent directional selling.

However, market sales from that inventory could increase short-term supply and create downside volatility. The transfer matters, but its purpose determines whether it becomes selling pressure.

Why is Ethereum Exchange Supply falling?

Despite Wintermute’s deposit, Ethereum’s broader Exchange Supply continued falling.

AMBCrypto previously reported that Ethereum reserves on Binance had reached a three-month low. Binance covered one venue. However, the Exchange Supply Ratio [ESR] showed that the decline extended across exchanges.

Source: CryptoQuant

ESR declined for ten consecutive days and reached 0.125 at press time. The metric had not visited this level since 2016. Its decline showed that exchanges held a smaller share of Ethereum’s circulating supply.

This suggested that the market absorbed individual deposits without creating a broad buildup of immediately sellable $ETH.

Historically, lower Exchange Supply can reduce selling pressure. The harder question was why $ETH remained weak as its liquid supply contracted.

Source: SwissIntelligence

SwissIntelligence data showed that 196 whales were distributing $ETH, compared with 125 accumulating.

Source: TradingView

This imbalance suggested that large-holder selling continued weighing on $ETH as whales secured modest gains.

The True Strength Index had declined since forming a bearish crossover several days earlier.

At the same time, the Balance of Power remained negative. Together, both indicators showed that sellers retained a short-term advantage despite declining exchange balances.

$ETH was caught between fewer immediately sellable coins and more whales willing to sell.

If whale distribution continues, $ETH could revisit $2,300 if Wintermute’s transfer becomes market sales. By contrast, shrinking Exchange Supply could help $ETH reclaim $2,600 and target $2,800 if demand returns.

The next move may reveal whether buyers can absorb whale sales without losing the emerging supply squeeze.

Final Summary

• Wintermute deposited 61,847 $ETH worth $160.3 million into Binance and Coinbase.
• Ethereum’s Exchange Supply Ratio reached 2016 levels, yet whale distribution continued weakening price momentum.

Source