In the past three days, Ether (ETH), the cryptocurrency that fuels the Ethereum blockchain’s smart-contract capabilities, has experienced significant selling pressure.
ETH/USD is currently trading around $1,830, reflecting a drop of more than 2% on Monday and a decline of over 9% from last week’s highs above the $2,000 mark.
Two days ago, the Ethereum Foundation, which is responsible for the development of the Ethereum blockchain, transferred $30 million worth of Ether to the cryptocurrency exchange Kraken.
The transfer of $30 million by the Ethereum Foundation to Kraken two days ago seems to have caused some anxiety in the market, intensifying the selling pressure that has affected other major cryptocurrencies such as Bitcoin.
In addition, the recent surge in gas fees due to increased trading activity of meme coins, particularly Pepe, may also be contributing to the negative sentiment around Ethereum. This spike in fees highlights the ongoing scalability issues faced by the blockchain. Will the ETH Price Crash as The Ethereum Foundation Sells $30 Million Worth of ETH? – Ethereum Price Prediction
Will the selling pressure lead to a crash in the ETH price?
Traders have pointed out that past major sales of ETH by the Ethereum Foundation have corresponded with market tops in the near term. For instance, in May 2021, the foundation sold 35,053 ETH, which marked a local top, followed by the sale of another 20,000 ETH in November 2021, just before the aggressive bear market drawdown in 2022.
That’s correct. It’s worth noting that while there have been instances where large Ethereum Foundation sales coincided with price tops, there have also been cases where this did not happen. For example, in June 2019, December 2020, and March 2021, the foundation sold significant amounts of ETH without causing big price drawdowns. It’s important to consider various factors when analyzing market movements and not rely solely on one event or factor.
The Ethereum Foundation might have regretted not waiting a little longer after the sales in December 2020 and March 2021, as the ETH price saw exponential growth shortly after those sales.
The options market indicates that investors are currently not very concerned about the potential for volatility in Ether Will the ETH Price Crash as The Ethereum Foundation Sells $30 Million Worth of ETH? – Ethereum Price Prediction
The ETH Volatility Index of Deribit, the leading cryptocurrency derivatives exchange, hit a record low of 51 on Saturday and remained at low levels on Monday, around 53.