ETH’s recent downside could be more than just a meager event thanks to…
- The Ethereum Foundation sells a large sum of ETH leading to bearish speculation.
- Address activity suggests that there is some accumulation despite the FUD.
The amount of FUD in the crypto market in the last few days intensified, as investor confidence evaporated. This has been the case, particularly for ETH following the Ethereum Foundation’s large sale.
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Recent prevailing sentiments especially regarding ETH suggested that it recently hit a local top. As such, downside expectations are notably higher this week. The Ethereum Foundation has historically offloaded a sizable amount of ETH from its addresses near the tops of a bullish trend. The Ethereum Foundation recently sold off 15,000 ETH.
Ethereum Foundation's large-scale selling in recent years record: Recently the Ethereum Foundation sold 15,000 ETH. In 2021, EF did sell 20,000 ETH at a high point. But in 2020, 100,600ETH was sold at a price of 657. pic.twitter.com/BCiSlutQ5F
— Wu Blockchain (@WuBlockchain) May 7, 2023
Although the foundation contributed to selling pressure in the past, it wasn’t always at the top of a bull trend. There have been a few instances where buying pressure prevailed despite large outflows from Ethereum Foundation addresses. In fact, multiple indicators confirmed that there was significant demand in the market.
Addresses holding 0.01 ETH or more just reached a new ATH, confirming that traders in the retail segment were buying. While this may lead to speculation that they are providing exit liquidity, a glance at whale activity revealed that addresses holding 1000 or more ETH have also started accumulating in the last two days.
The same whales previously contributed to selling pressure in the last four weeks.
Are mid-to-long term holders selling?
Recent data suggested that long-term holders were bowing to the FUD and pressure to take profits. According to the latest Glassnode alerts, ETH’s realized cap just reached a new five-month high. This meant that most investors selling their ETH had been selling at a profit.
— glassnode alerts (@glassnodealerts) May 8, 2023
The same findings could be taken as a sign that most of the recent buyers weren’t contributing to the prevailing sell pressure. In other words, there was still significant demand for ETH at its current price level. This may also explain why the downside is limited for now.
Realistic or not, here’s Ethereum’s market cap in BTC’s terms
ETH bears have been encountering support just above the $1800 price range. An increase in sell pressure may weaken the same support and lead to lower prices. There was a spike in active deposits in the last 48 hours at the time of writing, which underscores higher sell pressure.
Network growth has also tanked significantly since 5 May. This is likely due to lower organic activity amid the slow market conditions. The recent memecoin hype contributed to a significant amount of activity recently.