- Ethereum deposits to centralized cryptocurrency exchanges increased with sell-off driven by the ETH Foundation.
- Experts noted a spike in distributed ETH selling from market markets on Coinbase.
- ETH price has nosedived from its $2,000 peak to the $1,800 level crumbling under the rising selling pressure.
Ethereum, the second-largest asset by market capitalization is currently under intense selling pressure with the increase in ETH inflow to centralized exchanges. Typically, a rise in ETH inflow is associated with increased selling and a negative impact on the asset’s price.
Ethereum inflow to exchanges increases
Based on on-chain data from crypto intelligence tracker Santiment, there is a massive spike in Ethereum deposits to centralized cryptocurrency exchanges which signals an increases in short-term selling pressure on the asset.
Ethereum supply on exchanges
As seen in the chart above, the supply of Ether climbed to 12.87 million on May 6, from 12.53 million on April 19, 2023. In the same timeframe, ETH price declined from the $2,000 level to $1,895.
Interestingly, experts have noticed a spike in selling pressure on Coinbase, one of the largest centralized exchanges and the Ethereum Foundation transferred $30 million worth of Ether to collectively sell.
Andrew Kang, crypto influencer and trader believes when the Ethereum foundation transferred $30 million worth of ETH to exchanges, the rest of the market participants collectively sold or shorted $1 billion worth of ETH in response.
The expert presented his thesis on Ethereum in a recent tweet:
ETH Foundation transferred $30m to exchange and the rest of us/the market probably collectively sold/shorted $1B+ in response https://t.co/7j6g3ONKPz
— Andrew Kang (@Rewkang) May 6, 2023
Market makers engage in ETH distribution, increasing selling pressure
Analysts at @52kskew believe that Ethereum price needs to climb to the $1,900 level and sustain above that to tackle the selling pressure on the altcoin.
$ETH Spot CVD Buckets & Delta Orders
— Skew Δ (@52kskew) May 7, 2023
Pretty clear distributive selling from MMs in the past day into thick liquidity.
Coinbase as expected were the major ETH sellers "ETH Foundation"
if ETH can hold $1900, would say that's a some relative strength considering this kind of… pic.twitter.com/UWGGj1mGsY
Experts consider the $1,933 a key level for Ethereum, however believe that the altcoin needs to show strength to begin its recovery.
The altcoin’s price recently declined to the $1,800 level, with the increased supply on exchanges and distribution by the Ethereum Foundation and market makers. It remains to be seen whether ETH recovers from the recent pullback in its price.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
Bitcoin Weekly Forecast: BTC nosedives below $95,000 as spot ETFs record highest daily outflow since launch
Bitcoin price continues to edge down, trading below $95,000 on Friday after declining more than 9% this week. Bitcoin US spot ETFs recorded the highest single-day outflow on Thursday since their launch in January.
Bitcoin crashes to $96,000, altcoins bleed: Top trades for sidelined buyers
Bitcoin (BTC) slipped under the $100,000 milestone and touched the $96,000 level briefly on Friday, a sharp decline that has also hit hard prices of other altcoins and particularly meme coins.
Solana Price Forecast: SOL’s technical outlook and on-chain metrics hint at a double-digit correction
Solana (SOL) price trades in red below $194 on Friday after declining more than 13% this week. The recent downturn has led to $38 million in total liquidations, with over $33 million coming from long positions.
SEC approves Hashdex and Franklin Templeton's combined Bitcoin and Ethereum crypto index ETFs
The SEC approved Hashdex's proposal for a crypto index ETF. The ETF currently features Bitcoin and Ethereum, with possible additions in the future. The agency also approved Franklin Templeton's amendment to its Cboe BZX for a crypto index ETF.
Bitcoin: 2025 outlook brightens on expectations of US pro-crypto policy
Bitcoin (BTC) price has surged more than 140% in 2024, reaching the $100K milestone in early December. The rally was driven by the launch of Bitcoin Spot Exchange Traded Funds (ETFs) in January and the reduced supply following the fourth halving event in April.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.