As a seasoned analyst with over a decade of experience in the crypto market, I have witnessed my fair share of wild price swings and unexpected events. The recent selloff in Ethereum (ETH) has caught my attention, not just because of its magnitude, but due to the timely transfer of ETH by the Ethereum Foundation.
On August 27, there was a significant drop in Ethereum‘s price during the late US trading session, aligning with broader corrections across the crypto market. A notable point for ETH investors is the transfer of 35,000 ETH from the Ethereum Foundation on August 23. It’s worth mentioning that this isn’t the first time the organization associated with Ether has moved and sold its ETH reserves. Each instance where such a transfer was observed, Ethereum’s price has taken a significant hit.
5 days ago, the Ethereum Foundation transferred 35,000 ETH (approximately $94.07 million) to Kraken at a price of $2,688. Now, the price stands at $2,450, representing a decrease of 8.8%! It seems that Ethereum Foundation sold near the top once more!
Since Jan 1, 2021, the #Ethereum Foundation has sold 239K $ETH($654M).
— Lookonchain (@lookonchain) August 28, 2024
Ethereum Foundation’s Sell Signal Record
On August 23rd, the Ethereum Foundation saw a decrease in its Ethereum holdings, going from approximately 309,000 ETH to 274,00 ETH. Information from Arkham Intelligence indicates that the reduction of 35,000 ETH was moved to Kraken. Each time this entity sells Ether, it significantly affects Ether’s price. Many crypto investors view the foundation’s transactions as a potential sell signal because the Ethereum price typically experiences a downturn, forming a local peak.
The August 23 transfer resulted in a 14.51% crash in Ethereum price in the next five days.
Historically speaking, this perspective has consistently held up. To illustrate, the transfer of around 15,000 ETH valued at approximately $30 million on May 6, 2023, led to a significant drop of about 16% within a month, and then a more substantial decrease of 24% over the next three months.
Currently, the Ethereum Foundation possesses approximately 274,000 Ether, which is equivalent to around $675 million at current prices. Since the August 27 low of $2,392, ETH‘s price has risen almost 4%. If Bitcoin can recover and surpass the $60,000 psychological level, there’s a potential for further Ethereum recovery as well.
Ethereum Price Analysis: ETH Short-Term Recovery Rally on the Cards
The cost of Ethereum has moved beyond the offer-side liquidity levels that appeared after August 12th’s low points, a phenomenon known as “rinsing.” This occurrence is common in cryptocurrency futures markets and typically precedes a bullish trend. As a result, investors should anticipate a robust rebound in Ether’s price.
For this rebound to occur, Bitcoin’s power must be evident. If the price of Bitcoin shows bullish energy and successfully turns the $60,000 mark into a foundation floor, it could imply the initiation of a rally not only for Ethereum but also across the broader cryptocurrency markets.
This potential growth might lead Ethereum’s predicted price to challenge the $2,618 barrier once more, as it has now transformed into a resistance point.
Bolstering this perspective are the recent increases in large whale transactions valued at $1,000,000 and above. These transfers frequently represent institutional investors, and when they occur following a price decrease, they often signal potential buying opportunities after a dip. In many cases, if this metric surges after a severe selloff, it is typically followed by swift price recoveries.
If Ethereum’s price doesn’t bounce back, there’s a possibility that it might plunge an additional 11% before reaching a crucial support point at around $2,190.
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2024-08-28 13:08