The Ethereum Foundation, a non-profit organization supporting the Ethereum ecosystem, has recently raised eyebrows in the crypto community by making significant transfers of ETH. On May 8, the Foundation transferred 1,000 ETH (equivalent to $3 million) to a middle multi-signature wallet (0xbc9). This transaction has caught the attention of the crypto community and sparked speculations about whether this could indicate that the market top might be near.
Historical Sales Influencing Market Trends
SpotOnChain, an on-chain analytics platform, disclosed that the Ethereum Foundation has been involved in several transactions since the beginning of 2024. The Foundation reportedly sold 1,766 ETH for 4.81 million DAI at an average price of $2,725 per ETH. Interestingly, SpotOnChain highlighted that these transactions often precede a price drop. This pattern has led to concerns as the Foundation has a history of selling at the top, impacting ETH’s price in the past. For instance, in 2022, Ethereum witnessed a 40% drop after the Foundation sold off 20,000 ETH, while in 2021, the price of ETH experienced a prolonged downtrend following the sale of 35,000 ETH by the organization.
Journalist Colin Wu shed light on Ethereum’s founder, Vitalik Buterin, persuading the Ethereum Foundation to sell 70,000 ETH at the peak of 2018 to support developers’ work. Wu suggested that the Foundation’s sell-offs are strategic moves based on the belief that a bear market is on the horizon. This indicates that the Foundation might have an understanding of when the market top is approaching, aligning their sales with the anticipation of a significant market decline.
Crypto analyst Shin Forex has forecasted a potential drop in Ethereum’s price to as low as $2,500. This prediction stems from a slowdown in liquidity entering the Ethereum ecosystem, indicating a waning investor interest in the token. Additionally, from a technical analysis perspective, Shin Forex pointed out that the ETH/BTC pair has broken below its support of 0.05, a trend that has historically led to substantial crashes in Ethereum’s market cycles in 2016 and 2019.
The Ethereum Foundation’s recent ETH transfers have raised concerns about the market’s future direction. The historical impact of the Foundation’s sales on ETH’s price, coupled with insights into their market timing strategies, has led to speculations about a potential market top. As analysts predict a bearish outlook for Ethereum, investors and the crypto community will closely monitor how these developments unfold in the near future.