After performing fairly well in April, the Ethereum price has reversed almost all of its recent gains over the past month. As it is It collapsed under the weight of the bears Heading into the weekend, the altcoin finally found a support cushion just above $2,000 in the early hours of Saturday. However, the Ethereum token appears to be of interest to a special group of investors despite its disappointing performance over the past few weeks.
ETH is smart money to buy on the dip
In a recent post on X’s social media platform, Alfractal open A specific group of Ethereum investors known as the “smart money” is driving a narrative that most of the market may ignore. While headlines focused on large Ethereum ETF outflows and Ethereum losing $2,200 support, smart money investors remained active in the market.
According to Alphractal, smart money refers to the group of investors who hold the largest off-the-shelf positions in a particular cryptocurrency (ETH, in this case). Using the Smart Money Flow Index, the analytics firm found that this specific group of investors have accumulated more Ethereum tokens over the past few days.
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Going forward, Alphractal also shared that the smart money started tying ETH with Hyperliquid and Base in terms of volume during the May 14 price pullback. The market intelligence platform explained that the investor group was repositioning in the ETH market rather than selling their assets.
Source: @Alphractal on X
AlFractal noted that this behavior was last observed in October 2023, before the price of Ethereum rose from $1,500 to $4,100 — an increase of 173%. According to recent on-chain data, these smart money investors have been “net buyers” 9 out of the past 12 days.
The analytics company decided the following:
This is why single-scale theses on ETH fail. ETF outflows look bearish on their own. The smart money flow looks bullish on its own. Stack them up, and the picture is clear: Retail distributors and ETFs are selling for less than $2,200. The group that has already transferred ETH in the last two sessions buys it from them.
Ultimately, Alphractal concluded that Ethereum’s smart money is buying the dips while ETFs and retail investors are trimming their holdings, and if history is anything to go by, that’s the difference it could make. Earn over 100% return.
Ethereum price at a glance
As of this writing, ETH is at around $2,113, reflecting a jump of more than 2% over the past 24 hours. According to data from CoinGecko, the second-largest cryptocurrency is still down about 3% on the weekly time frame.
The price of ETH on the daily timeframe | Source: ETHUSDT chart on TradingView
Featured image from iStock, chart from TradingView
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