Whale accumulation is rising as global liquidity expands. The same M2 pattern that drove Ethereum's 2020-2021 surge is forming again—here's what's happening.
Ethereum Whales Accumulate Amid Global Liquidity Expansion
Ethereum whale wallets accumulated nearly $1.4 billion worth of ETH during November's price breakdown, buying aggressively between $3,247 and $3,515 even as the broader market pulled back. On-chain analytics from Glassnode and CoinDesk show that these large holders increased positions despite their profit margins compressing to near zero—a level that typically triggers sell-offs, not accumulation.
At the same time, exchange reserves have declined to about 16.1 million ETH, down more than 25% since 2022. This supply drain creates a structural tightening that historically precedes upward price moves when demand returns.
What's drawing attention is the macro parallel. Global M2 money supply—a measure of liquidity that includes cash, checking accounts, and savings—recently reached a record $95.58 trillion. This matters because Ethereum tends to track M2 expansion, though with a delay. During the 2020-2021 liquidity surge, M2 grew by 27% and Ethereum rallied over 200% from its cycle lows. Bitcoin moved first, then capital rotated into altcoins once BTC dominance fell.
We're seeing that rotation pattern again. Bitcoin dominance dropped to 60% in recent months, down 8.5% since June. Meanwhile, Ethereum has gained 77% in that period but still lags Bitcoin's overall performance since 2022. CryptoQuant analysts describe this as a "liquidity lag," suggesting ETH hasn't yet priced in the macro environment.
Institutional flows support the thesis. Ethereum ETFs recorded consecutive inflows in December, with BlackRock's product contributing $56.5 million in a single session. Combined with reduced exchange supply and whale accumulation near cost basis levels, the setup resembles early 2020 before Ethereum's breakout.
Whether this plays out the same way depends on sustained liquidity expansion and whether whales continue absorbing supply. But the pieces are aligning in a familiar pattern.