Ethereum is undergoing its most significant transition since its August peak.
A sharp, double-digit correction of more than 35% since Oct. 6 has triggered a crisis of conviction, ripping through the speculative layers of the market and forcing a wave of liquidations.
However, the on-chain story is not a simple collapse. It is a large-scale rebalancing of who controls the ETH supply.
The data shows a classic deleveraging event colliding with a structural accumulation trend. This comes as long-term holders sell and leveraged traders are purged, resulting in a new class of institutional treasuries that are indifferent to the short-term panic, methodically absorbing ETH’s supply.
Old ETH holders sell as leverage unwinds
For the first time since early 2021, Ethereum’s older investor cohorts are distributing at scale.
According to Glassnode, ETH holders with a 3-10 year holding period have increased their realized spending to more than 45,000 ETH per day on a 90-day moving average, a level not seen since February 2021.
This cohort represents some of the earliest and most profitable ETH investors. While their elevated spending does not signal panic, it rather reflects seasoned investors taking profits amid volatility.
A prime example is the recent activity from an Ethereum ICO participant. On Nov. 17, blockchain analysis platform Lookonchain reported that 0x9a67, after more than ten years of dormancy, transferred 200 ETH (approximately $ 626,000).
This wallet had invested just $310 in the 2014 ICO to receive 1,000 ETH, making the current holding worth over $3.13 million, representing a 10,097-fold return.
Meanwhile, this “old money” profit-taking is compounded by the catastrophic unwinding of leveraged positions.
For context, prominent trader Machi was liquidated again as the price dropped, contributing to his total trading losses of over $18.9 million. In a sign of the market’s intense volatility, he immediately reopened a new long position on 3,075 ETH ($9.6M) with a liquidation price just below the current market, illustrating the high-risk, chaotic nature of the speculative unwinding.
Adding to the noise, other prominent figures, such as Arthur Hayes, were also seen selling.
The most significant event, however, involved the “66,000 ETH borrowed whale.”
Blockchain platform Onchain Lens reported that the entity’s high-leverage Aave V3 position came under intense pressure as prices fell, forcing a withdrawal of 199,720 ETH (about $632 million) to prevent forced liquidation.
The whale subsequently sent more than 44,000 ETH to Binance to close the position. Estimated losses exceed $70 million, marking one of the largest single risk-off events of this cycle.
Institutions absorb the supply
The other side of this redistribution is the emergence of institutional-grade buyers building large ETH treasuries. These are not traders but accumulators.
BitMine, a digital-asset treasury firm chaired by market strategist Tom Lee, has expanded its holdings to 3.5 million ETH. This represents 2.9% of the total ETH supply, placing the company more than halfway toward its goal of accumulating 5% of all circulating ETH.
BitMine is not a hedge fund trading cycles but an ETH-denominated corporate treasury. Its stated goal is to accumulate and stake its supply, transforming a passive balance sheet asset into a long-term, yield-generating powerhouse.
As a result, the firm has aggressively acquired its ETH holdings and is currently the largest public holder of the digital asset.
SharpLink, another growing ETH treasury, mirrors this strategy. The firm now holds 859,400 ETH (valued at $2.74 billion) and has earned more than 7,067 ETH in staking rewards since mid-2025.
Combined, BitMine and SharpLink now control over 4.35 million ETH. Their programmatic accumulation acts as a structural floor, permanently removing this supply from the volatile, liquid market and locking it into staking contracts.
However, this methodical institutional accumulation contrasts sharply with a wave of retail-driven exits.
According to SoSo Value data, spot Ethereum ETFs are on track for their largest monthly outflow on record, with more than $1.2 billion withdrawn this month.
This contraction has resulted in a mixed, disorderly liquidity landscape.
ETF investors, who are often more reactive to price, are selling into fear. Leveraged traders are being forcibly liquidated. Simultaneously, long-term holders are taking multi-cycle profits, providing the very supply that new institutional treasuries are programmatically absorbing for long-term use.
This interplay is why the recent correction feels chaotic, even as the underlying mechanics of transfer from weak, reactive hands to strong, programmatic ones remain consistent with prior cycle resets.
The Supercycle Thesis
Lee, BitMine’s executive chair, argues the turmoil is a necessary phase of an emerging ETH “supercycle.” Lee draws a direct parallel to Bitcoin, which he first recommended to Fundstrat clients in 2017 at a price of around $1,000.
“We believe ETH is embarking on that same Supercycle,” Lee stated. “To have gained from Bitcoin’s 100x run, one had to stomach existential moments. [So, current crypto prices] simply discounting a massive future.”
That “massive future,” according to the institutional thesis, is Ethereum’s established role as the primary settlement layer of the global economy.
The bullish case for firms like BitMine and SharpLink is simple: Ethereum is the only chain where every major crypto economy actually settles.
The entire ecosystems of stablecoins, Layer 2 scaling solutions (L2s), perpetual derivatives, real-world assets (RWAs), and institutional custody flows all plug back into and create demand for ETH.
Lee views the sharp retracements not as structural failures, but as characteristic of an asset transitioning from pure speculation to macro relevance.
Taken together, the data reveal a market undergoing a large-scale, post-Merge restructuring. This is not a simple drawdown. It is a redistribution event where supply migrates from short-term, reactive hands to long-term, structurally committed ones.
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