Ethereum ICO Whale Dumps Another 6K ETH, Is Price Correction Ahead?

Ethereum’s price has been struggling over the past week, dropping more than 12% as of today. However, the asset saw a brief rally, finding support at an intra-day low of $2,312.58, and climbed back up to $2,438, a 5% increase from the day’s low. This rebound comes amid news that a prominent Ethereum ICO participant, often referred to as a “whale,” has sold another significant portion of their holdings.

Ethereum ICO Whale Sells 6,000 ETH

According to data from blockchain analytics firm LookOnChain, an anonymous whale participating in the Ethereum initial coin offering (ICO) recently sold 6,000 ETH, valued at approximately $14.11 million. This transaction is part of a bigger selling spree by the same whale who has been selling 40,000 ETH worth $101 million since September 22 at an average price of $2,525.

Nevertheless, the whale still has 99,500 ETH in possession, equivalent to $238 million at the current ETH prices. These large-scale selling have raised concerns among investors about further price corrections in the process. Recent activities of the whale indicate raising the alarm or a clear-cut plan to ensure profits are well protected should bears seize market control.

In the broader market, ETH’s circulating supply has been slowly increasing especially due to the recent changes in the monetary policy. Crypto analyst Benjamin Cowen pointed out in a recent series of tweets that Ethereum’s supply has been increasing by 60,000 ETH per month since April 2024, and if this trend continues, the total supply will be back at pre-merge levels by the end of the year. 

Cowen noted that the Federal Reserve’s recent rate cuts have stimulated demand, but a more aggressive cut of at least 100 basis points may be necessary for a strong shift in Ethereum’s price trend aligning with the Ethereum ICO move.

Benjamin Cowen also highlighted that there have been similar shifts in the past, in 2016 and 2019, especially where Ethereum’s price plunged in Q4. Going by Cowen’s analysis, the ETH/BTC price could be set for another sharp decline replicating previous trends.

Declining Investor Confidence in ETH

Investor sentiment towards ETH has shown signs of weakening, as reflected in reduced trading volumes and spot ETF inflows. Over the last week, Ethereum’s derivative trading volume decreased by 34.97%, now sitting at $21.94 billion. This reduction suggests waning interest and possibly lower liquidity in the market, which could signal a bearish outlook or a consolidation phase as seen by the Ethereum ICO move.

Additionally, open interest in Ethereum derivatives increased slightly by 2.80%, totaling $11.58 billion. This combination of lower volume but higher open interest may imply that some investors are holding their positions in anticipation of further price shifts, either up or down, in the coming months.

Moreover, Vitalik Buterin, Ethereum’s co-founder, has also proposed measures to strengthen the ecosystem amid these challenges. Recently, Buterin suggested reducing the minimum ETH staking requirement from 32 ETH to 16 ETH to encourage more participation in Ethereum’s proof-of-stake network.

Potential ETH Price Recovery with Strong Support Levels

Amid the Ethereum ICO move, technical analysis suggests that ETH recent decline has pushed its price into a crucial support range between $2,440 and $2,252. If ETH price manages to close above the midpoint of this range at $2,340, it could signal a stabilization point, with the possibility of a reversal. 

Market analysts point out that overcoming the $2,564 resistance level could set the stage for a potential rally toward the psychological $3,000 mark and even $3,500, depending on broader market conditions.

For this rally to materialize, however, Bitcoin’s performance will play a significant role. A stable BTC price around the $61,000 to $62,000 range could lend support to Ethereum and other altcoins, boosting investor confidence.