Is Vitalik Buterin’s $10M Ethereum Sale Bad News for ETH Bulls?
Ethereum founder Vitalik Buterin transferred about $10 million worth of his Ether holdings to wallets linked to the crypto exchange in August, according to data tracked by Lookonchain.
Additionally, Arkham Intelligence data shows that Buterin's Ether address has seen an influx of 422,000 ETH (worth $1.04 billion as of September 1, 2024) since 2015. Over 840,000 ETH have been withdrawn from the address in the past two years.
The transfers have led to speculation that Buterin is selling his Ether holdings to realize profits, especially since the cryptocurrency is trading 180% higher than its 2022 cycle low of $885.
Vitalik Butering Ether holdings. Source: Arkham Intelligence
However, Buterin denied these accusations.
I have not sold ETH for profit since 2018 – Buterin
In the year On August 31, Buterin stated that he will never sell his Ether holdings to realize a profit, noting that all ETH transfers since 2018 are supporting various projects that he thinks are important in the “Ethereum ecosystem or a wider charity”. “
Source: X
Interestingly, the August transfers correspond to a movement of 84,000 ETH worth more than $207 million from the official Ethereum Foundation address to crypto exchanges.
The Ethereum Foundation periodically sells ETH holdings to support development, research, and other initiatives important to the ecosystem.
Related: Vitalik Buterin Breaks Down 2023 Ethereum Foundation Cost
However, large Ether transfers can sometimes cause a short-term market reaction, because investors can interpret this as an upcoming selling pressure.
For example, in November 2021, the Ethereum Foundation transferred 20,000 ETH (estimated value of $95 million) to Kraken.
Ethereum Foundation ETH holdings chart. Source: Arkham Intelligence
The transfers occurred before Ether's price peaked and an 85% correction in the price, which contributed to the Ethereum Foundation's sale of Ether holdings – regardless of their intentions – to the ETH market crash.
Similarly, in May 2021, the Ethereum Foundation sold 350,000 ETH, prior to a 50% price drop in the Ether markets.
Will Ether Price Drop After Buterin, EF's ETH Sales?
Not all of the Ethereum foundation sales were before major market corrections.
For example, the sale of 100,000 ETH in December 2020 came before a 630% price rally. Additional factors behind Ether's price increase include the launch of the Beacon Chain, which marks Ethereum's conversion to a proof-of-stake, and the loose Federal Reserve monetary policy in the United States, which has boosted demand for risk-assets, including cryptocurrencies.
Ironically, Vitalik Buterin and the Ethereum Foundation's recent Ether sales come as the Fed plans to cut interest rates and the spot Ethereum Exchange Traded Fund (ETF) is winding down.
From a technical perspective, Ether is trading within the range defined by the 50-week (red) and 200-week (blue) moving averages (EMA).
The recent retracement from the 50-week EMA increases the chances of the price hitting the 200-week EMA – around $2,000 – in October, a 15% drop from current price levels.
ETH/USD weekly price chart. Source: TradingView
The 200-week EMA further coincides with the lower trend of Ether's multi-year ascending triangle pattern. This combination of support increases the chances of a sharp rebound, pushing Ether to retest the upper trendline of the triangle at $4,000 in late 2024 or early 2025.
This article does not contain investment advice or recommendations. Every investment and business activity involves risk, and readers should do their own research when making a decision.
