How Will the Market React to Recent ETH Sales by Ethereum Co-founder Buterin and the Foundation?Vitalik Buterin, the co-founder of Ethereum, recently transferred approximately $10 million worth of ETH to wallets associated with cryptocurrency exchanges, sparking market speculation about whether he was selling ETH. At the same time, the Ethereum Foundation sold 84,000 ETH worth over $207 million in August, using these funds to finance development, research, and other important projects within the Ethereum ecosystem
How Will the Market React to Recent ETH Sales by Ethereum Co-founder Buterin and the Foundation?
Vitalik Buterin, the co-founder of Ethereum, recently transferred approximately $10 million worth of ETH to wallets associated with cryptocurrency exchanges, sparking market speculation about whether he was selling ETH. At the same time, the Ethereum Foundation sold 84,000 ETH worth over $207 million in August, using these funds to finance development, research, and other important projects within the Ethereum ecosystem.
According to blockchain analytics platform Lookonchain, Buterin transferred 1,100 ETH to wallets associated with cryptocurrency exchanges in August. Prior to this, Buterin's Ethereum address had seen an outflow of approximately 422,000 ETH, worth up to $1.04 billion, since 2015. Over the past two years, more than 840,000 ETH has flowed out of this address.
These transfers have fuelled speculation that Buterin is selling his ETH holdings for profit, especially considering that the cryptocurrency is trading 180% higher than its 2022 cycle low of $885. However, Buterin himself has denied these allegations on social media, stating that he has not sold ETH for profit since 2018 and that all transfers were made to support projects he believes in, including the Ethereum ecosystem and charitable causes.
It is worth noting that the Ethereum Foundation regularly sells a portion of its ETH holdings to fund its operations and development. These sales sometimes cause short-term market reactions as investors may interpret them as upcoming selling pressure. For example, in November 2021, the Ethereum Foundation transferred 20,000 ETH worth approximately $95 million to the Kraken exchange. This transaction occurred before the peak in Ethereum's price, followed by an 85% price correction, which some consider to be related to the Ethereum Foundation selling its ETH holdings.
However, not all ETH sales by the Ethereum Foundation have been associated with significant market corrections. For instance, their sale of 100,000 ETH in December 2020 was followed by a 630% increase in the price of Ethereum. The price of Ethereum is influenced by numerous factors, including technical developments, macroeconomic conditions, and market sentiment.
Currently, Ethereum is trading within the range of its 50-week and 200-week exponential moving averages (EMA). The recent pullback from the 50-week EMA increases the likelihood of the price hitting the 200-week EMA (approximately $2,000) in October, representing a decline of about 15% from current price levels. The 200-week EMA further coincides with the lower trendline of Ethereum's multi-year ascending triangle pattern, this confluence of support increases the possibility of a significant bounce back, pushing Ethereum to retest the upper trendline of the triangle (around $4,000) sometime in late 2024 or early 2025.
In conclusion, the recent ETH sales by Buterin and the Ethereum Foundation may have short-term implications for the Ethereum market, but in the long term, the price trajectory of Ethereum will be determined by a multitude of factors, including technical development, market sentiment, and macroeconomic conditions. Investors should exercise caution and conduct thorough research before making any investment decisions.
Disclaimer: This document does not contain investment advice or recommendations. Every investment and trading activity involves risk, readers are responsible for doing their own research before making any decisions.
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