Ethereum Foundation on May 6th Transfer about $30 million in Ether (ETH) for the Kraken cryptocurrency exchange, is creating jitters in the market regarding a possible sell-off event.
ETH price fell 4.8% on the day to $1,900, but the decline has so far been negligible amid a broad recovery trend.
Key Support Holding ETH Price
Ether price recovered modestly to $1,920 on May 7 after testing its 50-day exponential moving average (50-day EMA; red wave) near $1,850 as support the day before.
Furthermore, as per the contract, the price volatility on Kraken dropped during the said period. Bollinger Bands width in the chart below. This shows the calm of traders during the Ethereum Foundation transfer.
Notably, the 50-day EMA has stopped Ether’s downside attempts in 2023, leaving sold out in early March This saw the price briefly falling below the red wave. Meanwhile, its testing as a support has propelled ETH price to further extend the breakout above $2,000.
As a result of this support, ETH bulls could make another attempt to take the price above $2,000.
Conversely, a drop below the 50-day EMA could provide traders with a support confluence near $1,700 for a multi-month uptrend and the 200-day EMA (blue wave) as the next downside target. That’s about 13% down from value. levels.
Even with the big drop, ETH will maintain its overall recovery trend as measured from its June 2022 low of $880.
Ethereum Exchange Reserve vs Kraken Reserve
An increasing exchange balance indicates potential selling pressure and vice versa. In the case of Ethereum, balances across all exchanges remained low despite the Ethereum Foundation transferring $30 million to Kraken.
For example, the ether balance on Kraken increased from 1.83 million the day before to 1.84 million ETH on May 6.
Nevertheless, balances across all exchanges actually fell from 18.22 million ETH to 18.15 million ETH that day, indicating that any potential selling-pressure from the Ethereum Foundation could be easily absorbed.
ETH market top not necessarily
The last large transfer by the Ethereum Foundation was 20,000 ETH in November 2021, when The price topped out near $4,850, and then a drop of 80%. Similarly, the foundation sold 35,053 ETH in May 2021 on the local market for around $3,500 at the top.
Connected: Ethereum Up 20% in April While Markets Pro Sees 379% Gain in One Day
Many analysts regard these fractals as a sign of another possible market top formation near $2,000, arguing that the price could decline in the coming sessions.
The Ethereum Foundation recently sold 20,000 ETH at the local top.
Every time the Eth Foundation / Vitalik / ConsenSys dumps a massive presale bag, it marks the top.
What is the difference between Ripple dumping millions by retail vs ETH founders? https://t.co/pw8ukMiR8v
— Brad Mills ⚡️ (@bradmillscan) January 28, 2022
But extensive data suggests otherwise. For example, large ETH sales by the Ethereum Foundation also occurred during the 2020-2021 bull cycle, fueled by increased demand for the risk-on asset. low interest rate macro environment,
In other words, there is little evidence to suggest that Ethereum Foundation sales have any impact on Ethereum’s price action. Instead, the cryptocurrency market is currently taking cues from american banking crisis and will it force the Federal Reserve to stop hiking and cut interest rates,
This article does not constitute investment advice or recommendations. Every investment and trading move involves risk, and readers should do their own research when making decisions.
