Ethereum Whales Build $2.9K Support as DATs Drain Supply

Ethereum’s recent market decline, which saw ETH trade at $4,177 on Monday, has revealed significant accumulation activity by large-scale investors. According to data from CryptoQuant, Ethereum accumulation addresses now show an average realized price of approximately $2,900, marking what analysts describe as a crucial support zone. This level has climbed sharply from $1,700, demonstrating substantial buying activity fueled by the ETH ETF rally. The total balance in these addresses has reached 27.6 million ETH, indicating strong conviction among major holders despite recent price volatility.

Analysts suggest that in a worst-case bear market scenario, the $2,900 level could act as firm support, potentially cushioning Ethereum against deeper market declines. While this support zone remains approximately 30% below current prices—representing a considerable pullback—the establishment of this baseline by whales provides a psychological and technical floor for the asset. The rapid increase in realized price from $1,700 to $2,900 within a relatively short timeframe underscores the intensity of institutional and whale accumulation during market dips.

Beyond whale activity, institutional demand has amplified buying pressure through Digital Asset Treasuries (DATs). CoinMetrics reported that DAT accumulation is now outpacing new ETH issuance since The Merge in September 2022. This development has created a unique supply dynamic where institutional buying neutralizes inflationary dilution, even as validators receive fewer rewards from staking. Staking yields have dropped to near 3% as more ETH becomes locked in the network, reflecting both increased participation and the supply absorption by DATs.

Unlike typical validators who often redistribute staking rewards, Digital Asset Treasuries are largely hoarding ETH, creating what analysts describe as a supply vacuum. This behavior could make Ethereum scarcer and potentially more valuable over time. The combination of DAT accumulation and reduced new issuance post-Merge has created deflationary pressures that contrast with traditional inflationary monetary systems. This supply dynamic has been further supported by regulatory developments, including favorable US stablecoin legislation that helped ETH surge back above $4,000 in September.

Ethereum continues to dominate stablecoin activity, with nearly 65% of total stablecoin supply settled on its network. This trend has been accelerated by the approval of the GENIUS Act, which has provided regulatory clarity for stablecoin operations. Daily stablecoin transfer volumes have surpassed $60 billion, directing substantial transaction fees to validators and bolstering network security through increased economic activity.

Despite these strengths, Ethereum faces significant challenges from emerging competitors. New ‘stable-chains’ and faster blockchain networks threaten Ethereum’s settlement advantage, while its relatively long block times risk constraining future growth if not addressed. Layer 2 networks offer a partial solution by alleviating congestion and enabling faster, cheaper transactions, but continued developer focus on scaling solutions will be critical for maintaining Ethereum’s competitive position.

The balance between deflationary pressures from DAT accumulation, validator incentives amid declining staking yields, and competition from emerging chains will determine Ethereum’s ability to maintain momentum. While recent market volatility has tested investor confidence, the underlying fundamentals—including whale-established support, institutional accumulation, and stablecoin dominance—suggest structural strength beneath the surface price movements.