Vitalik Buterin's $10M Ethereum Sale: Bad News for ETH Bulls?
Date: 2024-09-02 Author: Gabriel Deangelo Categories: CRYPTO PAYMENTS
Ethereum co-founder Vitalik Buterin moved about $10 million in ETH to wallets linked to crypto exchanges in August, according to Lookonchain data.
Additionally, Arkham Intelligence data shows that about 422,000 ETH (worth $1.04 billion as of September 1, 2024) have been withdrawn from Buterin's Ethereum address since 2015. Over the past two years, over 840,000 ETH have been withdrawn from that address.
These transfers have sparked speculation that Buterin is selling his ETH holdings for profit, especially given that the cryptocurrency is trading 180% higher than its 2022 cyclical low of $885.
I Haven’t Sold ETH for Profit Since 2018 — Buterin
On August 31, Buterin clarified that he has never sold his ETH holdings for profit, noting that all of his ETH transfers since 2018 have been to support various projects he finds valuable, whether in the Ethereum ecosystem or broader philanthropy.
Interestingly, the August transfers coincided with the movement of 84,000 ETH, worth over $207 million, from the official Ethereum Foundation address to crypto exchanges.
The Ethereum Foundation periodically sells a portion of its ETH holdings to fund development, research, and other initiatives important to the ecosystem.
However, large Ether transfers can sometimes cause short-term market reactions, as investors may perceive them as a sign of impending selling pressure.
For example, in November 2021, the Ethereum Foundation transferred 20,000 ETH (worth approximately $95 million) to Kraken. These transfers occurred just before the Ether price peaked, followed by an 85% decline in its value, indicating that the Ethereum Foundation's sales contributed to the ETH market decline.
Similarly, in May 2021, the Ethereum Foundation sold 350,000 ETH, which preceded a 50% decline in the ETH market.
Will the Ether Price Fall After Buterin and the Ethereum Foundation's Sales?
Not all Ethereum Foundation sales preceded significant market corrections.
For example, their sale of 100,000 ETH in December 2020 occurred before a 630% price increase. Additional factors that contributed to the rise in the price of Ether were the launch of the Beacon Chain, which marked Ethereum’s transition to Proof-of-Stake, and the loose monetary policy of the US Federal Reserve, which increased demand for risk assets, including cryptocurrencies.
Interestingly, the recent Ether sales by Vitalik Buterin and the Ethereum Foundation come at a time when the Fed is planning to cut interest rates and the outflow of funds from Ethereum spot ETFs is slowing.
From a technical perspective, Ether is trading in a range defined by its 50-week (red) and 200-week (blue) exponential moving averages (EMA).
The recent pullback from the 50-week EMA increases the likelihood that the price will reach the 200-week EMA – around $2,000 – by October, which is 15% below current levels.
The 200-week EMA also aligns with the lower trendline of Ethereum’s multi-year ascending triangle. This alignment of support levels increases the likelihood of a sharp bounce, which could lead to a retest of the triangle’s upper trendline — around $4,000 — by late 2024 or early 2025.
