The Ethereum Foundation, a non-profit organization that supports the Ethereum ecosystem, recently transferred a significant amount of ETH. Given what this transaction could imply, it has drawn the crypto community’s attention, which is already speculating about whether the market top might be in.
Ethereum Foundation Moves 1,000 ETH
On-chain analytics platform SpotOnChain revealed in an X (formerly Twitter) post that the Ethereum Foundation transferred 1,000 ETH ($3 million) to a middle multi-signature wallet (0xbc9) on May 8. This development is more concerning as SpotOnChain revealed that the Foundation has made other transactions since the start of 2024.
According to the platform, the Ethereum Foundation has sold 1,766 ETH for 4.81 million DAI at an average price of $2,725 for each ETH. These transactions are said to have occurred in “several small batches via the same multi-signature wallet. Interestingly, SpotOnChain noted that these transactions often occur ahead of a price drop.
It is worth mentioning that the Ethereum Foundation already has a reputation for selling at the top, suggesting that their selling ahead of a drop might not be a coincidence. In 2022, NewsBTC reported that Ethereum dropped by 40% after the Foundation sold off 20,000 ETH. Meanwhile, in 2021, ETH experienced a downtrend for months after the organization sold off 35,000 ETH.
ETH’s price action after the Ethereum Foundation sold 20,000 ETH in 2022 | Source: Tradingview.com
Journalist Colin Wu also revealed back then that Ethereum’s founder, Vitalik Buterin, had persuaded the foundation to “sell 70,000 ETH at the top of 2018 to support the work of developers.” Wu further claimed that the Foundation’s sell-off is a “normal operation, but it also means that the Foundation thought that bear market was coming.”
Therefore, from Wu’s revelation, one can deduce that the Ethereum Foundation could have an idea of when the market top is, which prompts them to always make these sales before ETH makes a significant decline.
An ETH Decline May Already Be On The Horizon
A crypto analyst known as Shin Forex recently predicted that Ethereum could soon drop to as low as $2,500. The analyst explained that there has been a slowdown in liquidity flowing into the Ethereum ecosystem. This could affect ETH’s price since it suggests a lack of interest in the token among investors.
From a technical analysis perspective, Shin Forex also revealed that the ETH/BTC pair has now broken below its support of 0.05. Ethereum is said to have experienced a significant crash when this happened in the market cycles in 2016 and 2019. As such, the analyst does not doubt that ETH will likely spiral down again, with the crypto token dropping to as low as $2,500.
At the time of writing, Ethereum is trading at around $3,000, according to data from CoinMarketCap.
ETH price looking to establish support above $3,000 | Source: ETHUSD on Tradingview.com
Featured image from The Motley Fool, chart from Tradingview.com