Ethereum, the leading altcoin, has been on a rollercoaster ride, hovering near the $4,000 mark, driven by the US Securities and Exchange Commission's (SEC) historic decision to approve spot ETH ETFs. This development has fueled trader optimism, with ETH gaining almost 20% over the past month. However, a closer look at the data reveals a troubling trend - increased inflows of ETH into cryptocurrency exchanges, signaling a potential selling spree.

On May 26th, the volume of Ether entering exchanges reached its peak since January, with a net inflow of 140.66k ETH, marking the highest net deposits in more than four months. According to IntoTheBlock, such significant inflows to exchanges usually indicate selling activity, as individuals aim to secure profits or react to fear, uncertainty, and doubt (FUD). This trend is a stark contrast to the market's expectation of a continued price rally, fueled by the SEC's approval.

A closer examination of the data reveals that "smart money" investors are cashing in on their profits, taking advantage of the recent price gains. One such investor recently sold 3,025 ETH for 11.8 million DAI at an ETH price of $3,904, resulting in a profit of approximately $1.11 million. This investor had accumulated 17,770 ETH between 2017 and 2020 at an average cost of $182 per ETH, selling it on March 28, 2024, at a price of $3,503 per token, generating a profit of around $59 million.

Another Ethereum whale was spotted withdrawing 2,856 ETH, valued at $11 million, from Kraken. This whale had previously accumulated 35,176 ETH from the same exchange at an average price of $428 per ETH between October 2018 and November 2022. On October 20, 2023, the whale deposited all this ETH back into Kraken when the price was $1,610 per ETH, realizing a profit of approximately $41.6 million. However, this sell-off was mistimed, as the crypto market rallied shortly after. If the whale had held onto their ETH, their profit would now be around $122 million.

The recent price slump below $3.9K has sparked fears of a potential downturn, with investors taking profits or reacting to FUD. The increased inflows to exchanges signal a selling trend, contradicting the market's expectation of a continued price rally. As the crypto market continues to evolve, it remains to be seen whether this trend will continue or if Ethereum will bounce back, driven by the SEC's approval and market optimism. One thing is certain - the crypto market is full of surprises, and investors must stay vigilant to navigate its twists and turns.