An influential whale, previously known for shorting the market just before the October 11 liquidations, has initiated a new strategy involving the Aave lending protocol. This whale has deposited Ethereum (ETH) onto Aave to borrow additional stablecoins.
The whale, identified as the "1011 seller," has opened a new ETH-based strategy utilizing the Aave lending protocol to leverage its ETH holdings. The whale deposited 55,240 ETH onto Aave, subsequently borrowing $50 million USDT and an additional $20 million USDT.
The operation involved two known wallets. One address unstaked and provided 20 million USDT. Another address holds over 70,000 wrapped ETH on Aave, indicating significant exposure to ETH despite prior shorting activities.
Following the borrowing, the stablecoins were transferred to Binance in two separate transactions. This marks the first recorded wallet activity for this whale in three months. During this period, the whale primarily held Bitcoin (BTC) positions and briefly engaged in long bets on Hyperliquid.
Shortly after the 1011 whale's transactions, a new wallet emerged, withdrawing 42,000 ETH from Binance. It remains unclear whether this new wallet is connected to the whale's previous activities.
Potential for Future ETH Accumulation
The recent activity on the Ethereum network has fueled speculation that the whale, identified as Garrett Jin, may intend to use the borrowed funds to acquire more ETH or other assets. This whale is recognized as a market indicator, often signaling potential shifts in sentiment and acting at pivotal moments.
As of December 1, the whale held no positions on Hyperliquid. Currently, the whale's assets are valued at $176 million, predominantly consisting of USDT and wrapped ETH on Aave.
The 1011 whale was also active earlier in November. By November 12, the whale had closed all ETH long positions, realizing a profit of $2.85 million.
While the whale has not demonstrated long-term conviction in ETH, it has successfully capitalized on market recoveries. The current borrowing activity suggests a potential preparation to buy at local lows or a market bottom in the near future.
Furthermore, the whale has posted ETH for staking, indicating at least a partial allocation towards long-term bullish expectations for Ethereum. This ETH deposit for staking was made alongside several other wallets, all selecting the same staking smart contract from their chosen staking pool.
During the recent market downturn, Aave's Total Value Locked (TVL) decreased to $31 billion, attributed to the lower price of ETH. The whale's recent move occurred as ETH was trading back in the $2,800 range, following a recent decline.
Ethereum's Recovery Prospects
Ethereum has shown some signs of a potential reversal in recent days, including renewed buying interest from whales. However, the token experienced another decline following a series of long liquidations.
The ETH open interest continued to decrease, falling to 31 points, which suggests deepening fear in the market. During periods of low sentiment, ETH may attract renewed buying interest as whales rotate their positions to acquire assets at a lower average price.