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May 6th, Ethereum Foundation forwarded The sale of approximately $30 million worth of Ether (ETH) to cryptocurrency exchange Kraken has caused market anxiety about a possible sale event.
ETH price fell 4.8% to $1,900, but the drop so far has been minimal in a broader recovery trend.
ETH price hold key support
Ether price recovered slightly to $1,920 on May 7 after testing near $1,850 with support from the 50-day exponential moving average (50-day EMA, red wave).
Moreover, according to the narrowing Bollinger Bands width in the chart below, the Kraken saw lower price volatility during the above period. This further shows that traders are calm amid the Ethereum Foundation move.
Notably, the 50-day EMA has held back Ether’s downside attempts so far in 2023, barring an early March sell-off when the price briefly dipped below a red wave. Meanwhile, testing it as a support has pushed ETH price to pursue his breakout above $2,000.
As a result of this support, ETH bulls may target prices above $2,000 again.
Conversely, a break below the 50-day EMA will see the confluence of support, including the multi-month uptrend line and the 200-day EMA (blue wave) near $1,700, about 13% below current prices. We may look at it as the next downtrend target. level.
Measured from the June 2022 low of $880, ETH is likely to maintain its overall recovery trend even if it falls significantly further.
Ethereum Exchange Reserve and Kraken Reserve
A rise in currency balances suggests potential selling pressure and vice versa. In the case of Ethereum, balances remained low across all exchanges even though the Ethereum Foundation transferred his $30 million to Kraken.
For example, Kraken’s Ether balance increased from 1.83 million ETH to 1.84 million ETH on May 6th.
Nevertheless, balances on all exchanges actually decreased from 18.22 million ETH on the day to 18.15 million ETH.
Not necessarily the top of the ETH market
The Ethereum Foundation’s last big transfer was 20,000 ETH in November 2021, with a price above about $4,850 and an 80% drop since then. Similarly, the foundation said that in May 2021 he sold 35,053 ETH at a local market high of around $3,500.
Related: Ethereum is up 20% in April, Markets Pro is up 379% in a single day.
Many analysts have treated these fractals as signs of a possible another top-of-the-market formation near $2,000, arguing that prices may fall in the upcoming sessions.
The Ethereum Foundation sold an additional 20,000 Ether at its recent local top.
Every time eth Foundation/Vitalik/Consensys throws out a massive presale bag, it marks the top.
What’s the difference between rippledumping hundreds of millions of dollars in retail stores and the founder of ETH doing it? https://t.co/pw8ukMiR8v
— Brad Mills ⚡️ (@bradmillscan) January 28, 2022
However, extensive data suggest otherwise. For example, the Ethereum Foundation’s massive ETH sale also occurred during the 2020-2021 bull market. This was driven by increased demand for risk-on assets in a low interest rate macro environment.
In other words, there is little evidence to suggest that Ethereum Foundation sales have had any impact on Ethereum price movements. will be forced to stop rate hikes and cut rates.
This article does not contain investment advice or recommendations. All investment and trading moves involve risk and readers should conduct their own research when making decisions.
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