Arthur Hayes Trims ETH Position While DeFi Tokens Rally on Institutional Buying

Market data reveals that a prominent cryptocurrency investor has been systematically reducing his Ethereum holdings over recent weeks, reallocating capital into emerging decentralized finance projects. On December 20, chain analytics indicated that this investor offloaded 1,871 ETH (approximately $5.53 million) and simultaneously accumulated positions in three high-potential DeFi assets: 1.22 million Ethena (ENA) tokens valued at $257,500, 137,117 Pendle (PENDLE) tokens worth $259,000, and 132,730 Ether.fi (ETHFI) tokens totaling $93,000.

The follow-up transaction on December 24 saw an additional 682 ETH worth approximately $2 million converted into these same DeFi tokens, signaling sustained conviction in the sector’s growth trajectory.

Market Dynamics: Why Institutional Capital Is Shifting Toward DeFi

Ethereum has faced mounting selling pressure over the past month, trading around $2,936 with losses of 3.3% across the 30-day period. The largest altcoin remains caught in a consolidation pattern, struggling to reclaim psychological resistance levels and experiencing deteriorating investor sentiment.

In contrast, the rebalancing activity demonstrates sophisticated market participants’ confidence in DeFi protocols despite their recent weakness. Ethena, Pendle, and Ether.fi have all experienced notable pullbacks—trading at $0.19, $1.89, and $0.65 respectively as of latest data—down approximately 13%, 11%, and 11% over the past week. This discrepancy between ETH’s stagnation and DeFi altcoins’ correction presents an opportunity that institutional actors appear to be capitalizing on.

The strategic shift reflects a broader belief that as fiat liquidity conditions improve, these innovative DeFi protocols possess superior growth potential compared to Ethereum’s current trajectory. Whale accumulation at depressed valuations typically indicates medium-term confidence in asset recovery.

Price Trajectory and Key Resistance Levels

Ethereum dropped below the $3,000 support threshold on December 15 and has struggled to reclaim this crucial level. At $3.22K as of latest market data, ETH shows modest 7-day gains of 3.74%, though underlying momentum remains fragile. The $3,000 region continues to function as formidable resistance, having repelled multiple rally attempts.

Without sustained buying volume entering the market, ETH risks deteriorating toward lower support near $2,500. The continued institutional repositioning—exemplified by both this investor’s moves and similar actions from other market participants—underscores persistent skepticism toward Ethereum’s near-term performance.

The divergence in smart money allocation suggests a tactical thesis: DeFi tokens offer superior risk-reward dynamics during this consolidation phase, while Ethereum may continue experiencing headwinds until broader market conditions shift in its favor.