Ethereum Foundation’s Recent Selloff and Historical Impact
On August 23, the Ethereum Foundation transferred 35,000 ETH, worth approximately $94.07 million, to Kraken. At the time of transfer, the ETH price was $2,688, but it has since dropped to $2,450, reflecting an 8.8% decline. This transfer is part of a pattern where the Foundation’s sales have historically coincided with price crashes.
According to data from Arkham Intelligence, the Foundation’s balance decreased from 309,000 ETH to 274,000 ETH following the transfer. Every previous instance of the Foundation selling ETH has significantly impacted Ethereum’s price, often signaling a local top.
Historical Sell Signals and Price Movements
The August 23 transfer led to a 14.51% drop in Ethereum’s price over the following five days. This pattern mirrors previous occurrences, such as on May 6, 2023, when the transfer of 15,000 ETH resulted in a 16% decline within a month and a 24% drop over the subsequent three months.
Currently, the Ethereum Foundation holds 274,000 ETH, valued at $675 million. The ETH price has recently rebounded nearly 4% from its August 27 low of $2,392. Future recovery could be influenced by Bitcoin’s performance, particularly if it recovers above the $60,000 level.
Short-Term Ethereum Price Outlook
Ethereum’s price has recently cleared the sell-side liquidity below the swing lows established after August 12. This technical development, known as rinsing, often precedes a bullish move in the crypto futures markets. Investors might anticipate a strong recovery rally for ETH, contingent on Bitcoin’s bullish momentum.
If Bitcoin manages to turn the $60,000 level into a support floor, it could signal a broader recovery in the crypto market, potentially lifting Ethereum’s price back towards the $2,618 resistance level.
Institutional Activity and Future Prospects
The recent uptick in whale transactions, each worth $1 million or more, further supports the potential for a price rebound. These large transactions, typically conducted by institutional investors, often indicate dip-buying opportunities. Historical data shows that spikes in whale activity following a significant selloff frequently lead to price reversals.
However, if Ethereum fails to recover, it could experience an additional decline of up to 11%, potentially reaching a key support level of $2,190.
Conclusion
The Ethereum Foundation’s recent ETH transfer has once again demonstrated its impact on Ethereum’s price. While historical patterns suggest potential declines following such events, the current recovery rally and institutional activity may indicate a positive shift. Monitoring Bitcoin’s performance and whale transactions will be crucial for assessing Ethereum’s future price trajectory.
Ecosystem
Research
News Network
About