Whales are buying the dip, should you? ETH is below $4K !!

The recent decision by the Commodity Futures Trading Commission (CFTC) to label Ethereum (ETH) as a commodity has sparked optimism in the cryptocurrency market.

Despite facing challenges such as the London Hard Fork upgrade, Ethereum managed to have a modest increase of 0.79% in March. Although the cryptocurrency struggled to break the $4,000 mark, it currently sits at $3,500.

Interestingly, this slump did not discourage large investors from adding Ethereum to their portfolios. Whale transactions worth over $100,000 increased significantly, resulting in a rise in small whale wallets.

These investors employed an accumulation strategy known as "buy the dip," which involves purchasing assets during price drops to benefit from future price increases.

This bullish sentiment among large investors is driven by research and business acumen. Typically, this strategy is applied to assets with strong fundamentals and long-term growth potential.

The whales' optimism was also reflected in the derivatives markets, with a majority of whale positions on Binance betting on Ethereum to rise.

The positive outlook of the whales seemed to influence the broader market sentiment, leading to a mood of "Greed" as per the Fear and Greed Index. Such sentiments often attract more investors and create buying pressure, further driving up the price of Ethereum.

But what motivated the whales to be bullish on ETH? One significant factor is the recent lawsuit in which the CFTC referred to Ethereum as a commodity. This designation has reignited investors' hopes for the approval of Ether spot exchange-traded funds (ETFs).

Previously, there was pessimism surrounding the approval of these ETFs, with the possibility of the Securities and Exchange Commission (SEC) considering Ethereum as a security. However, the CFTC's classification as a commodity has renewed optimism for an Ether spot ETF approval.

If approved, spot ETFs for Ethereum have the potential to have a similar impact on the cryptocurrency as Bitcoin has experienced since mid-January.

The introduction of Bitcoin ETFs has been a significant catalyst for the price surge and increased institutional adoption of Bitcoin. Similarly, an Ethereum spot ETF approval could attract more institutional investors and contribute to the further growth and mainstream acceptance of Ethereum.