A wallet linked to the ethereum Foundation has reportedly liquidated $13.3 million worth of eth, raising eyebrows and sparking talk of a possible price drop.
The ethereum Foundation's decision to liquidate $13 million worth of ethereum (eth) has left investors contemplating the transaction's potential impact on the price of the world's second-largest cryptocurrency by market capitalization.
Traditionally, the foundation's shares are seen as harbingers of market changes, raising concerns about a possible decline. Despite this, ethereum is showing bullish signs as seen on the charts today.
The ethereum price chart presents an optimistic view with a strong uptrend, marked by consistently higher highs and lows. ethereum, currently trading at $3,550, has seen a 14.6% rise over the past seven days, with a market capitalization of $420 billion and crypto market dominance of 17.8%, according to CoinGecko.
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Although market pullbacks are natural in an uptrend, they prompt investors to get ahead of themselves as the market waits for its next move. The weekly Relative Strength Index (RSI) stands at 89.95, approaching the overbought zone, suggesting a possible correction, which aligns with the recent liquidation of the ethereum Foundation.
In the broader context of the market, bitcoin (btc) has gained more than 28% in the last seven days, approaching its all-time high of $69,000 in November 2021. At the time of writing, the price of btc is hovering in the region of $67,000.
Meanwhile, the ethereum network is preparing to activate the Dencun upgrade, combining the Cancun and Deneb upgrades. Scheduled for March 13, this upgrade aims to significantly reduce Layer 2 transaction fees while improving ethereum's scalability, efficiency, and security.
On February 27, the ethereum Foundation ethereum.org/2024/02/27/dencun-mainnet-announcement” target=”_blank” rel=”noopener”>Announced which had successfully activated the update on the test networks.
Last month, ethereum saw substantial growth, attracting 1.8 million new users to its network. Santiment's metric-tracking funded Ether wallets revealed an increase, with total eth holders reaching 115.5 million addresses.
In contrast, btc witnessed a decline of 70,000 wallet addresses during the same period, underscoring ethereum's market dominance.
Rising demand for new eth addresses and a $2.3 billion decline in exchange supply position ethereum favorably for a potential rally toward $4,000 in March 2024.
Spot ethereum ETF Prospects
Amid ethereum's positive trajectory, several issuers are seeking approval for ethereum spot ETFs, reflecting the success of btc spot products. However, the SEC's delays and comments from commissioners point to challenges on the road ahead.
An upcoming meeting between the US Securities and Exchange Commission (SEC) and ethereum spot ETF applicants later this month will determine the fate of Ether-based investment vehicles. Product decisions are postponed until May at the earliest, with VanEck's presentation leading the queue. SEC approval or rejection by May 23 will influence other issuers, including BlackRock, Franklin Templeton, Grayscale and Invesco Galaxy.
The approval of bitcoin spot ETFs in January marked significant progress after years of rejections. This decision, influenced by a Grayscale lawsuit against the SEC, was seen as a turning point in legitimizing cryptocurrency adoption and investment in the United States.
