will his co-founder sell en masse?

This news coincides with the US Securities and Exchange Commission’s (SEC) potentially imminent decision on an Ethereum-based ETF, which has heightened expectations within the crypto industry.

Investors transfer their ETH to exchanges

Jeffrey Wilke, one of the co-founders of Ethereum, notably transferred 10,000 ETH, worth approximately $37.38 million, to the crypto exchange Kraken. Although the reason for such a large transfer is not clear, we can draw some hypotheses:

  • Profit taking: Mr. Wilke could be about to sell his tokens to make a profit. This could be due to achieving a desired return on investment or forecasting a potential market decline.
  • Portfolio rebalancing: Wilke could seek to rebalance his portfolios by selling certain tokens and buying others. This may be due to changing market conditions, project development or its investment strategy.
  • Market speculation: Wilke could speculate on ETH price movements in the short term or take advantage of arbitrage opportunities between different exchanges.
Jeffrey Wilke portfolio activity. Source: SpotOnChain

Whether Mr. Wilke is looking to cash in, rebalance his portfolio, or speculate in the market, he doesn’t appear to be alone in doing so. Examining the Ethereum balance on crypto exchanges reveals a peak in the amount of coins available for sale.

  • The Balance on Exchange indicator: This is the total amount of Ethereum held in crypto exchange wallets.

Over the past two weeks, more than 242,000 ETH have been transferred to exchange wallets. This indicates increased trading activity on these platforms, which may contribute to price volatility.

To go further: ETH predictions for 2024/2025/2030

Ethereum balance on exchanges. Source: Glassnode

Approval of an Ethereum ETF imminent?

The timing of these transfers is particularly notable, as it aligns with the SEC’s final decision just today regarding Vaneck’s Ethereum ETF application. Interestingly, on May 20, the SEC asked Nasdaq, CBOE, and NYSE to refine their Ethereum spot ETF listing applications, hinting at potential approval of these filings.

In response to this regulatory development, Eric Balchunas and James Seyffart, ETF analysts at Bloomberg Intelligence, noted that the probability of approval has since increased significantly, from 25% to 75%.

“I heard this afternoon that the SEC might do a 180-degree turn on this increasingly political issue, and everyone is rushing. But again, we are capping at 75% until we know more, for example regarding file updates,” Mr. Balchunas wrote.

To know more : Want to learn more about crypto ETFs? We explain to you

Ethereum ETF Approval Odds
Ethereum ETF Approval Odds. Source: Polymarket

Similarly, Polymarket, a decentralized prediction market platform that allows users to bet on global events, is showing a massive increase in approval chances, which have increased from 10% to 70% in the last 72 hours.

A wake-up call for traders

Although some industry leaders like Anthony Pompliano view the approval of the Ethereum ETF as an “industry-wide endorsement” and “the last dam to break,” traders should still remain cautious. Indeed, the increase in ETH deposits in the portfolios of crypto exchanges suggests the possibility of a wave of sales or a peak in profit taking shortly.

Meanwhile, the Tom DeMark Sequential Indicator (TD) is showing a sell signal on the ETH daily chart.

  • TD Sequential Indicator: This is a technical analysis tool to identify potential market trend exhaustion points and upcoming price reversals.
    • Establishment phase: This involves counting a series of nine consecutive price bars, where each bar closes at a level higher (for an uptrend) or lower (for a downtrend) than the bar from four periods earlier.
    • Countdown phase: After the establishment phase, a countdown begins where a series of thirteen additional price bars are counted whether they close lower (in a downtrend) or higher (in an uptrend) than the close two bars higher early.

The current nine green candlestick on the daily chart suggests that a spike in selling pressure could force Ethereum price to retrace for one to four daily candlesticks, or even begin a new downward countdown phase before that its upward trend does not resume.

Ethereum Price Analysis
Ethereum price analysis. Source: TradingView

Despite these bearish signals observed in on-chain and technical data, the In/Out of the Money Around Price (IOMAP) indicator suggests that Ethereum is above important support zones, which could well hold in case of correction.

  • IOMAP: This measurement makes it possible to analyze and visualize the distribution of holders’ positions in relation to the current price. It helps understand potential support and resistance levels based on the number of addresses holding a particular cryptocurrency at different levels of its price.
    • “In the Money”: Refers to addresses that acquired the cryptocurrency at a lower price than the current market price, indicating potential support levels as holders are likely to sell at a profit.
    • “Out of the Money”: Refers to addresses that acquired the cryptocurrency at a price higher than the current market price, thus indicating potential resistance levels as holders might want to break even or minimize losses.

So, based on IOMAP, over 1.81 million addresses purchased approximately 1.66 million ETH between $3,820 and $3,700. This demand zone could maintain the price of Ethereum amid increasing selling pressure. That said, if it does not hold, the next key support zone lies between $3,580 and $3,462, where 3.13 million addresses purchased over 1.50 million ETH.

Ethereum IOMAP
Ethereum IOMAP. Source: IntoTheBlock

On the other hand, the most important resistance barrier for ETH lies between $3,940 and $4,054. Here, over 1.16 million addresses had previously purchased around 574,660 ETH.

If the crypto asset overcomes this obstacle and records a daily candlestick close above $4,170, then the bearish outlook will be negated. This could result in a new phase of bullish countdown towards $5,000.

Summary and conclusions

Ethereum co-founder Jeffrey Wilke’s recent transfer of 10,000 ETH to Kraken is indicative of more widespread activity in the market, where investors are moving significant amounts of ETH to crypto exchanges. This trend thus aligns with an increase in trading activity, suggesting potential profit-taking, portfolio rebalancing, or market speculation among Ethereum holders. The ETH balance on exchanges thus experienced a peak, indicating a potential increase in market volatility.

This market move comes at a critical time, as the SEC is set to issue a final ruling on Vaneck’s Ethereum ETF. Analysts noted a substantial increase in the probability of approval, from 25% to 75%. Such regulatory developments are seen as a positive signal for the entire cryptocurrency market, potentially paving the way for further institutional investments.

Find out more: How to buy Ethereum (ETH)? Everything you need to know about this asset

Despite technical indicators suggesting a possible short-term bearish trend, the IOMAP indicator shows solid support levels for Ethereum. This suggests that while there may be short-term corrections, the underlying demand for this asset remains robust. Long-term holders seem so confident, continuing to accumulate ETH, which is quite encouraging for its price stability and future growth.

Moral of the story: It takes more than one ETH transfer to start panicking.

Disclaimer

Disclaimer: In accordance with The Trust Project guidelines, this price analysis article is intended for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to providing accurate and unbiased information, but market conditions may change without notice. Always do your own research and consult a professional before making any financial decisions.

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