Ethereum Smart Money Might Be Repeating This Playbook — ETH Soared 173% Last Time

After a fairly good performance in April, the Ethereum price has reversed almost all its recent gains over the past month. As it crumbled under the weight of the bears heading into the weekend, the altcoin eventually found a cushion of support just above $2,000 in the early hours of Saturday. However, the Ethereum token seems to be enjoying the attention of a special cohort of investors despite its disappointing run over the past few weeks.

ETH Smart Money Buying The Dip

In a recent post on the social media platform X, Alphractal revealed that a specific set of Ethereum investors known as “smart money” is driving a narrative that most of the market might be overlooking. While the headlines have focused on significant Ethereum ETF outflows and ETH losing $2,200 support, smart money investors have remained active in the market.

According to Alphractal, smart money refers to the cohort of investors that owns the largest non-exchange positions in a particular cryptocurrency (ETH, in this case). Using the Smart Money Flow Index, the analytics firm found that this specific set of investors has been accumulating more Ethereum tokens over the past few days.

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Going further, Alphractal also shared that the smart money started bridging ETH to Hyperliquid and Base in size during the price downturn on May 14th. The market intelligence platform clarified that the investor cohort was repositioning in the ETH market rather than selling their assets.

Alphractal noted that this behavior was last observed in October 2023, before the price of Ethereum soared from $1,500 to $4,100 — a 173% move. According to recent on-chain data, these smart money investors have been “net buyers” 9 out of the last 12 days.

The analytics firm resolved that:

This is why single-metric theses fail on ETH. ETF outflows look bearish alone. Smart Money Flow looks bullish alone. Stack them, and the picture is obvious: retail and ETF allocators are selling under $2,200. The cohort that ACTUALLY moved ETH in the last two cycles is buying it from them.

Ultimately, Alphractal concluded that the Ethereum smart money is buying the dip while ETF and retail investors are shaving their holdings, and, if history is anything to go by, it is a divergence that could yield an over-100 % return.

Ethereum Price At A Glance

As of this writing, the price of ETH stands at around $2,113, reflecting an over 2% jump in the past 24 hours. According to data from CoinGecko, the second-largest cryptocurrency is still down by about 3% on the weekly timeframe.