Whales awaken: Ethereum rotates, XRP faces sell-off pressure

The traditional view holds that veteran investors rarely sell during weak phases, typically accumulate when prices drop, take profits during market euphoria, and spend most of the time maintaining steady holdings.

But the end of 2025 is challenging this model. On Ethereum, XRP, and some DeFi sectors, large dormant wallets are moving assets to exchanges while mid-term buyers are leaving the market. This has created a two-phase distribution pattern, clearly revealing which assets have a strong cost basis and which remain “thin” due to reliance on new investors.

Distribution, Not Panic

The key difference in this phase isn’t whether there is “selling,” but when and who is selling.

When ETH dropped below $3,200 in mid-November, whales accumulated an additional 460,000 ETH, while Santiment’s Age Consumed indicator slowed down instead of spiking.

This divergence is important: the amount of very old ETH did not surge on-chain despite whale balances rising, indicating that selling came from holders of 3–10 years—not wallets from the ICO era.

Glassnode data shows this group is selling about 45,000 ETH per day at a steady pace, a stark contrast to panic sells earlier in the year when both short- and long-term investors rushed to exit.

XRP Shows the Opposite Scenario

The Dormant Circulation for 365-day holders reached its highest since July, as whales moved large amounts of long-idle XRP to Binance.

CryptoQuant’s 100-day SMA for the Whale-to-Exchange Flow indicator peaked on November 6, indicating a months-long structural distribution trend rather than a sudden spike.

Combined with a wave of supply activation from the 1 year+ and 3–12 month groups, the picture becomes clear: XRP’s 2025 rally has drawn major investors out of waiting mode—and they see exiting as the rational choice.

While this flow has cooled, it remains at its yearly peak.

XRP’s Whale-to-Exchange flow reached multi-year highs at the end of 2024 before gradually declining through November 2025, tracking price volatility throughout the year.## Realized Cap: A Measure of Market Structure

Realized cap reflects the total capital cost of the entire supply, based on the price at which each coin last moved.

• For assets with a long accumulation history over several cycles, realized cap acts as a sustainable support base.
• For assets where realized cap is mainly built in a hot rally, the structure is fragile: when the top group sells, there’s little “cushion” below.

Ethereum’s realized cap stood at $391 billion (on November 18), absorbing selling from old investors thanks to new money entering at various price levels.

Conversely, XRP’s realized cap surged from $30 billion to $64 billion during the late 2024 rally, with $30 billion coming from buyers in the past six months. By early 2025, holders under six months accounted for 62.8% of realized cap—concentrating capital cost at the highest price region.

When whales release old supply just as new holders start incurring losses, XRP’s realized cap structure becomes most vulnerable.

Realized cap (realized capitalization) is an on-chain metric measuring the actual value of the total supply of an asset, based on the price at which each coin last moved—rather than using the current market price like market cap.

Dormancy: An Early Indicator of Market Rotation

Dormancy indicators track when previously “sleeping” supply comes back into circulation. Spikes in these indicators don’t automatically signal a top, but often foreshadow a shift in market state.

When cycle-tested investors decide current conditions are enough to exit their positions, their moves often precede broader distribution waves, as they operate on longer time horizons and larger positions than smaller retail investors.

For Ethereum, strong Age Consumed spikes in September and October came from ICO-era wallets moving after years of inactivity—but these moves happened in a strong market, not during panic.

By mid-November, as whales holding 1,000–100,000 ETH had accumulated over 1.6 million ETH, the Age Consumed indicator quieted down, showing that large flows were coming from the rotation of large holders rather than ancient wallets capitulating.

This creates a support base: if the oldest holders aren’t selling and mid-term whales are buying, the spot market can easily absorb moderate profit-taking from the 3–10 year group.

In contrast, XRP’s dormancy model tells the opposite story. The 365-day Dormant Circulation hit its highest since July, with repeated red spikes as old supply woke up and was sent to exchanges.

The frequency of supply activation kept increasing as the price struggled to hold above $2, showing that those who patiently accumulated are reassessing risk-reward and now see waiting as no longer reasonable.

When dormancy spikes coincide with weakening spot demand and realized cap is “top-heavy,” the message is clear: veteran investors are distributing into a market unable to absorb without breaking price support.

Who Will Be the “Bagholders”?

If Ethereum’s distribution trend continues at the current pace—the 3–10 year group selling about 45,000 ETH per day while whales accumulate and realized cap rises—the result will be a market with stronger long-term support, but greater short-term volatility.

Newcomers who bought in at $3,000–$3,500 will become marginal sellers if prices drop further, while veteran investors still have enough unrealized profits to weather another correction.

Conversely, if dormant XRP supply keeps activating while realized cap remains concentrated in sub-six-month holders, the path narrows.

Each distribution wave by veteran investors pushes new buyers further into the red. Since these new holders account for most of realized cap, their capitulation would collapse the entire cost base—not just “test” it.

This risk is self-reinforcing: whales distribute → newcomers cut losses → realized cap drops → support structure weakens → the next generation of holders is even more fragile.

For protocols like Aave, where dormancy data is limited, even a single address selling 15,396 AAVE during a downtrend and realizing a $1.54 million loss shows signs of forced or panic exits by newcomers, not profit-taking by long-term holders.

When such losses occur while the asset trades below all major moving averages and DeFi risk appetite wanes, it’s a clear signal that late-cycle capital is leaving the market rather than rotating.

Who Will Call the Bottom?

The central question this cycle:

Is this healthy rotation, or the start of a prolonged exit process, with cost structure too “thin” to withstand distribution?

• Ethereum shows most flows coming from the mid-term group, with realized cap rising—a sign of new money absorption.
• XRP, on the other hand, shows strong dormancy spikes from long-term holders, while 62.8% of realized cap belongs to newcomers.

The outcome depends on who “blinks” first:

• If newcomers keep holding and demand remains steady, the market absorbs selling and forms a higher price base.
• If they panic first, realized cap will fall, cost base depth disappears, and the next support is much lower.

Whales have started to move.

Whether this is just a rotation—or the start of a deeper distribution cycle—depends on whether there’s anyone left strong enough to absorb what they’re selling.

Vuong Tien