Markets
Ethereum Founder to Sell $37 Million in ETH Before ETF Decision
Recent significant transfers of Ethereum (ETH) to cryptocurrency exchanges have caught the market’s attention. This measure raised speculation about potential profit taking, portfolio rebalancing or market speculation.
These developments coincide with the US Securities and Exchange Commission’s (SEC) approach to the Vaneck Ethereum exchange-traded fund (ETF), which has raised expectations within the industry.
Investors transfer ETH to exchanges
Jeffrey Wilke, one of the founders of Ethereum, transferred 10,000 ETH, worth around $37.38 million, to the Kraken cryptocurrency exchange. Although the reason behind such a significant transfer is unclear, some hypotheses can be derived from it.
- Making a profit: Wilke may be selling his tokens for profits. This may be due to achieving the desired return on investment or anticipating a potential downturn in the market.
- Rebalancing Portfolios: Wilke may be rebalancing his portfolios by selling some tokens and buying others. This may be based on changes in market conditions, project development or your investment strategy.
- Market speculation: Wilke may be speculating on short-term price movements or taking advantage of arbitrage opportunities between different cryptocurrency exchanges.
Jeffrey Wilke Portfolio Activity. Source: SpotOnChain
Whether Wilke wants to book profits, rebalance his portfolio or speculate in the market, he doesn’t appear to be alone. Looking at the Ethereum balance on exchanges reveals an increase in tokens available for sale.
- Balance on Exchanges: Refers to the total amount of Ethereum held in cryptocurrency exchange wallets.
Over the past two weeks, more than 242,000 ETH has been transferred to cryptocurrency exchange wallets. This indicates an increase in trading activity on exchanges which may contribute to price fluctuations. volatility.
Ethereum ETF Approval Nears
The timing of these transfers is notable as it aligns with today’s SEC final decision on the Vaneck Ethereum ETF. Interestingly, on May 20th, the SEC requested Nasdaq, CBOE and NYSE to refine its spot Ethereum ETF listing applications, hinting at possible approval of these registrations.
In response to this regulatory development, Eric Balchunas and James Seyffart, ETF analysts at Bloomberg Intelligence, noted that the probability of approval has increased substantiallygoing from just 25% to a considerable 75%.
“I heard rumors this afternoon that the SEC might be doing a 180 on this increasingly political issue, so now everyone is scrambling. But again, we capped the value at 75% until we see more, for example, filing updates,” Balchunas wrote.
See more information: Ethereum ETF explained: what it is and how it works
Similarly, Polymarket, a decentralized prediction market platform that allows users to place bets on world events, show a significant increase in the chances of approval, which increased from 10% to 70% in the last 72 hours.
Warning signal for traders
Although industry leaders like Anthony Pompliano to see approval of the Ethereum ETF as an “industry-wide approval” and as “the last dam to be broken”, traders should be cautious. Rising ETH deposits in cryptocurrency exchange wallets suggest the possibility of a sell-off or increased profit-taking.
Meanwhile, the Tom DeMark (TD) Sequential indicator presents a sell signal on the Ethereum daily chart.
- TD Sequential Indicator: This is a technical analysis tool used to identify potential points of market trend exhaustion and future price reversals.
- Configuration phase: This involves counting a series of nine consecutive price bars, where each bar closes higher (for an uptrend) or lower (for a downtrend) than the bar four periods prior.
- Countdown phase: After the setup phase, a countdown begins where a series of thirteen additional price bars are counted if they close lower (in a downtrend) or higher (in an uptrend) than the close of the previous two bars.
The current nine green candlesticks on the daily chart suggest that an increase in selling pressure could cause Ethereum to pull back from one to four daily candlesticks or even begin a new downward countdown phase before the uptrend resumes.
Despite the bearish signals seen from a technical and on-chain perspective, the In/Out of the Money Around Price (IOMAP) indicator suggests that Ethereum is above significant areas of support that could hold in the event of a correction.
- IOMAP: This metric helps analyze and visualize the distribution of holders’ positions in relation to the current price. It helps you understand potential support and resistance levels based on the number of addresses holding a specific cryptocurrency at different price levels.
- In money: Refers to addresses that purchased the cryptocurrency at a price lower than the current market price, indicating potential support levels as holders are likely to sell at a profit.
- Out of money: Refers to addresses that purchased the cryptocurrency at a price higher than the current market price, indicating potential resistance levels as holders may want to break even or minimize losses.
Based on IOMAP, more than 1.81 million addresses purchased around 1.66 million ETH between $3,820 and $3,700. This demand zone could keep Ethereum’s price in check amid growing selling pressure. But if it fails to sustain, the next key area of support will be between $3,580 and $3,462, where 3.13 million addresses purchased over 1.50 million ETH.
See more information: Ethereum (ETH) Price Prediction 2024/2025/2030
On the other hand, the most important resistance barrier for Ethereum is between $3,940 and $4,054. Here, more than 1.16 million addresses had already purchased around 574,660 ETH.
If Ethereum overcomes this hurdle and prints a daily close above $4,170, the bearish outlook will be invalidated. This could result in a new upward countdown phase towards $5,000.
Summary and conclusions
Ethereum co-founder Jeffrey Wilke’s recent transfer of 10,000 ETH to Kraken is indicative of broader market activity where investors are moving significant amounts of ETH to exchanges. This trend is in line with increased trading activity, suggesting potential profit-taking, portfolio rebalancing, or market speculation among Ethereum holders. The balance of ETH on exchanges has skyrocketed, indicating a potential increase in market volatility.
This market movement comes at a critical time as the SEC is about to make a final decision on Vaneck’s Ethereum ETF. Analysts noted a substantial increase in the probability of approval, from 25% to 75%. Such regulatory developments are seen as a positive sign for the broader cryptocurrency market, potentially paving the way for more institutional investment.
See more information: How to buy Ethereum (ETH) and everything you need to know
Despite technical indicators suggesting a possible short-term downtrend, the IOMAP indicator shows strong support levels for Ethereum. This suggests that while there may be short-term corrections, underlying demand for Ethereum remains robust. Long-term holders appear confident, continuing to accumulate ETH, which bodes well for its future price stability and growth.
Disclaimer
In line with the Confidence Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate and unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult a professional before making any financial decisions. Please note that our Terms and conditions, Privacy PolicyIt is Disclaimers have been updated.