40% of eth-price">Ethereum Supply Is Underwater as Whales Take Divergent Positions

Approximately 40% of Ethereum’s total supply is currently underwater, meaning these coins were last moved or acquired at prices above the present market value, resulting in unrealized losses for holders. Amid this backdrop, large Ethereum holders, known as whales, are displaying contrasting behaviors—some are accumulating more ETH despite losses, while others are liquidating holdings. Understanding this divergence is key to interpreting current market dynamics and potential future price movements.

What happened

On-chain data from blockchain analytics firms such as Nansen and Glassnode confirm that around 40% of Ethereum’s circulating supply is underwater. This reflects the proportion of ETH last transacted at prices higher than today’s market levels, indicating a significant volume of holders facing unrealized losses.

Within this context, Ethereum whales—defined as addresses holding 10,000 or more ETH—are behaving in a split manner. Some large holders are increasing their Ethereum balances, effectively accumulating more tokens despite the prevailing losses. Simultaneously, other whales are reducing their holdings, either by liquidating assets to cut losses or by rebalancing their portfolios. This divergence is reported by BeinCrypto and supported by the on-chain data from Nansen and Glassnode.

This split in whale behavior coincides with periods of heightened on-chain volatility and fluctuating liquidity pools on decentralized exchanges (DEXs). Glassnode’s analytics highlight that these liquidity dynamics are influencing price stability, as selling pressure from liquidating whales is partially absorbed by accumulating whales. Market commentary from sources like Santiment and Delphi Digital interpret this as a tug-of-war scenario in the Ethereum market.

Analysts referenced by BeinCrypto and Delphi Digital suggest that these opposing positions may reflect differing market outlooks among whales: some anticipate a price rebound and are therefore accumulating, while others act cautiously, liquidating to manage risk or respond to portfolio constraints. Additionally, the presence of a large underwater supply may create a "holding wall," where sellers are reluctant to realize losses, thereby temporarily suppressing selling pressure.

Why this matters

The divergent strategies among Ethereum whales have significant implications for market structure and liquidity. The coexistence of accumulation and liquidation at large scales suggests an unsettled market sentiment, where confidence in Ethereum’s long-term value is unevenly distributed among major holders. This dynamic can influence price stability by balancing selling pressure with buying interest, potentially preventing sharp declines but also indicating underlying uncertainty.

The fact that 40% of ETH supply is underwater is structurally important. It may reduce immediate selling pressure because holders are disincentivized to sell at a loss, effectively creating a liquidity barrier that can stabilize prices. However, it also means a large portion of the market is vulnerable to shifts in sentiment or external shocks, which could trigger increased volatility if those holders decide to liquidate.

Moreover, the liquidity fluctuations observed on DEXs during this period suggest that decentralized finance platforms play a critical role in absorbing or amplifying whale activity. Changes in liquidity pools impact price discovery and volatility, linking whale behavior directly to broader market mechanics.

Understanding these dynamics is vital for market participants and observers because whale movements often precede significant price shifts. The current divergence may signal a pending resolution in market direction, with implications for Ethereum’s price trajectory and the broader crypto ecosystem.

What remains unclear

Despite detailed on-chain data, several important questions remain unanswered. The specific motivations driving individual whale behaviors are not publicly disclosed and cannot be inferred from blockchain data alone. It is unclear whether accumulators are primarily long-term investors, protocol insiders, arbitrageurs, or other types of market participants. Similarly, the reasons behind liquidation—whether margin calls, portfolio rebalancing, or reactions to external macroeconomic factors—are not distinguishable.

The sustainability of the current liquidity absorption by accumulating whales is also unknown. It is not clear whether these buyers can continue to offset selling pressure or if a shift in their behavior might lead to cascading liquidations or a sharper price correction.

Furthermore, the influence of off-chain factors such as regulatory developments, Ethereum network upgrades, or macroeconomic conditions on whale strategies is not captured in the on-chain data. This limits the ability to fully understand or predict whale behavior and its impact on market outcomes.

Finally, there is no definitive quantitative model linking the observed divergence in whale behavior to specific price movements or timing in early 2026. Existing interpretations remain speculative and require further empirical validation.

What to watch next

Monitoring on-chain indicators such as whale wallet inflows and outflows to detect shifts in accumulation or liquidation patterns.
Tracking changes in staking activity and liquidity pool dynamics on decentralized exchanges to assess their impact on price stability and volatility.
Observing regulatory announcements or Ethereum network upgrade timelines that may influence whale strategies or market sentiment.
Analyzing updated reports from blockchain analytics firms like Nansen and Glassnode for changes in whale behavior and underwater supply metrics.
Following market commentary from data-driven research providers such as Santiment and Delphi Digital for evolving interpretations of whale activity and price implications.

The current divergence in Ethereum whale behavior—simultaneous accumulation and liquidation amid a large underwater supply—reflects an unsettled market environment with significant implications for liquidity and price dynamics. While on-chain data provides valuable insights into these patterns, key questions about motivations, sustainability, and external influences remain open. Continued observation of whale movements and related indicators will be essential to understanding Ethereum’s price trajectory in the coming months.

Source: https://beincrypto.com/ethereum-whale-losses-december-2025/. This article is based on verified research material available at the time of writing. Where information is limited or unavailable, this is stated explicitly.