Ethereum Foundation On ETH Selling Spree, What’s Happening?

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As a seasoned analyst with over two decades of experience in the financial markets, I find myself intrigued by the recent developments surrounding Ethereum (ETH) and the Ethereum Foundation. While the consistent sell-offs by the institution have raised eyebrows, it is essential to approach this situation with a discerning eye and a healthy dose of skepticism.

As an analyst, I’ve observed a notable trend in recent weeks: The Ethereum Foundation appears to be offloading its Ethereum (ETH) reserves. This action has stirred curiosity and conjecture within the cryptocurrency sphere. Additionally, Ether’s less-than-impressive performance hovering around $3,300 following the ETF launch is a point of concern that warrants further scrutiny.

Ethereum Foundation’s ETH Offloading Spree

As per information from Arkham Intelligence, an address linked to the Ethereum Foundation (0xd7…c1f4) has recently offloaded 150 Ether via the Cow Protocol, receiving approximately 497,250 DAI in return. This transaction, executed at 05:21 a.m. EST today, mirrors a trend that’s been noticed since the start of the year.

For nearly a month’s interval, the same location has regularly exchanged Ethereum for DAI, with amounts varying between 50 and 200 Ethereum each time. Furthermore, there was a significant sell-off of Ethereum by the Ethereum Foundation last week. On July 26, it was reported by blockchain analysis firm Lookonchain that an Ethereum Foundation wallet moved 92,500 ETH, equating to approximately $294.9 million.

For the first time in approximately six and a half years, a new digital wallet was utilized. This wallet initially received Ether (ETH) from the Ethereum Foundation on September 1, 2015. As a result, the recent transaction raises questions about potential ETH sell-offs by this institution.

Furthermore, it’s worth noting that on July 23, the Ethereum Foundation liquidated 100 Ether, receiving approximately 345,179 DAI in return. This action took place concurrently with the launch of Spot Ethereum Exchange-Traded Funds (ETFs), adding to market buzz. Also, the recent divestments by the Ethereum Foundation have ignited debates about potential effects on Ether’s price, hinting at possible bearish trends.

ETH ETF Outflows & FOMC Meeting

Despite these large transactions, the market has demonstrated strength, with the price of Ethereum maintaining its position around $3,300 following a steep decline earlier this month. For a bullish trend to develop, Ethereum must surpass the $3,500 threshold and continue to climb towards $4,000.

Starting from its second day in operation, Ethereum ETFs have experienced a general trend of outflows due to Grayscale’s ETHE. Yet, there’s been a promising sign for the market as the rate of Grayscale ETHE ETF outflows has decreased. On Tuesday, July 30, newly introduced Spot Ethereum ETFs reported net inflows totaling $33.7 million, with BlackRock accounting for an impressive $118 million influx.

Over the past month, the influx of funds has significantly increased confidence in the Ethereum (ETH) price, as it had been trailing behind Bitcoin (BTC). Simultaneously, QCP Macro’s analysis offers valuable perspectives on the overall market situation.

Moving forward, Quantitative Consulting Partners (QCP) foresees a rise in market turbulence before today’s Federal Open Market Committee (FOMC) meeting. They do not predict a rate reduction this time and consider the meeting statement and Fed Chair Jerome Powell’s press conference as more significant. QCP’s primary assumption is that they will reduce rates by one percentage point in both September and December, but any departure from these predictions might prompt sell-offs across all asset categories, including cryptocurrencies.

Additionally, QCP observes that inflows into Spot Ethereum ETFs are beneficial. However, they anticipate further withdrawals from ETHE in the upcoming two weeks. Consequently, they suggest favoring ETH long positions as ETHE outflows diminish and ETH regains parity with BTC. Their objective is to surpass the $4,000 mark, which corresponds to the 2024 high.

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2024-07-31 15:14