The Ethereum Foundation is on the agenda with its $ 30 million ETH transfer recently. ETH price lost 5% in the first transfer yesterday. Can it fall harder this time?
Ethereum Foundation just sold $30 million worth of ETH
The Ethereum Foundation transferred approximately $30 million worth of ETH on May 6. According to Etherscan, the Foundation has sent 15,000 ETH to Kraken, while founder Vitalik Buterin has sent 200 ETH. A large amount of ETH sent to the centralized exchange is causing tension about a potential sell-off. As Kriptokoin.com, we reported that the ETH price went down independently of the market yesterday.
In terms of price, ETH has lost the $1,900 zone, where it was down 5% yesterday evening. It recovered slightly on May 7 and returned to $1,920 after testing the 50-day EMA near $1,850 as support.
Also, according to the narrowing Bollinger Bandwidth in the chart above, Kraken’s price action has slowed in the given period. This further accentuates the stagnation of investors during the transfer of the Ethereum Foundation.
Notably, the 50-day EMA has capped Ether’s downside attempts so far in 2023. It blocked selling in early March when the price briefly plunged below the red wave. Meanwhile, testing as support caused ETH price to surge above $2,000. As a result of this support, ETH bulls will aim to push the price back above $2,000.
Ethereum FX reserves vs. Kraken reserves
A rising currency balance indicates increased potential selling pressure and vice versa. In the case of Ethereum, the balance remained lower across all exchanges, despite the Ethereum Foundation’s transfer of $30 million to Kraken. For example, Kraken’s Ether balance increased to 1.84 million ETH on May 6 from 1.83 million the day before.
However, the balance across all exchanges fell from 18.22 million ETH to 18.15 million ETH during the day. This suggests that any potential selling pressure from the Foundation can be easily absorbed.
Sales have not always been at the market peak
The Ethereum Foundation’s last major transfer was 20,000 ETH in November 2021, when the price exceeded $4,850 and then fell 80%. Similarly, the foundation sold 35,053 ETH at around $3,500, the market peak in May 2021.
Many analysts argue that the price may decline in the coming sessions. He considers these fractals as a sign of another possible market top formation around $2,000.
https://twitter.com/bradmillscan/status/1487082089484898305
But larger data suggest otherwise. For example, the Ethereum Foundation’s large ETH sales also occurred during the 2020-2021 bull cycle, with increased demand for risky assets in a lower interest rate macro environment.
In other words, there is little evidence that the Ethereum Foundation’s sales have any effect on Ethereum’s price trend. Instead, the cryptocurrency market is currently taking cues from the US banking crisis and whether this will force the Fed to halt its march and cut interest rates.
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