Ethereum (ETH) price wobbled below $1,600 on October 9 as markets reacted to insider-controlled wallets withdrawing millions. Can ETH avoid a prolonged bearish price reversal?
The Ethereum Foundation is a non-profit organization dedicated to advancing and supporting the development of the Ethereum blockchain and its ecosystem. Wallets associated with the foundation have been observed selling ETH coins when prices reached local peaks.
Ethereum Foundation Sends 1,700 ETH to Kraken Exchange
On Monday, October 9, an 0x9eE wallet address was spotted moving 1,700 ETH, worth $2.73 million, into a Kraken exchange. According to the blockchain analytics platform Arkham Intelligence, the wallet is linked to the Ethereum Foundation.
Historical data from Santiment shows how Ethereum’s price sank by 14% barely a week after the foundation made a significant outflow on May 6.
Crypto insiders routinely cash out portions of their holdings by moving them into an exchange wallet to be traded for fiat or other tokens. It often triggers significant market reactions depending on the context, size, and other macro circumstances surrounding insider outflows.
Historical data shows that Ethereum foundation outflows have often coincided with local price peaks. And curiously, ETH price has already wobbled 2% to drop below the vital $1,600 support level within hours of the latest $2.73 million outflow transaction.
If the bearish trend that followed the $30 million transaction recurs, ETH price could sink toward $1,500 in the weeks ahead.
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Ethereum Exchange Netflows Recently Reached a 5-Month Peak
A closer look at the on-chain data reveals that ETH exchange net flows had hit a 5-month peak just days before the Ethereum foundation moved 1,700 ETH into Kraken.
Ethereum inflows into crypto exchanges on October 3 had exceeded outflows by a staggering 79,000 ETH. The IntoTheBlock chart below also shows that the last time ETH inflows into exchanges exceeded outflows by such a large margin was back in May.
This emphasizes the growing bearish sentiment across the Ethereum ecosystem.
Exchange Netflows subtract the daily token outflows from the new inflows. A positive netflow indicates more assets are flowing into exchanges than those moved into long-term storage and self-custody.
The increasing number of ETH tokens available to be traded on exchange spot markets is a significant bearish signal. It implies that many current holders are potentially looking to liquidate their positions in the short term.
Unless the macro sentiment flips, this could exert downward pressure on the Ethereum price in the coming weeks.
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ETH Price Prediction: All Eyes on the $1,500 Support
The abovementioned on-chain indicators illustrate visible bearish activity among Ethereum insiders and broader retail market participants. If these trends persist, Ethereum price will retest the $1,500 level in the weeks ahead.
But, currently, the Global In/Out of Money Around Price (GIOM) data, which depicts the entry price distribution of ETH holders, paints a neutral picture. Despite the massive exchange inflows, it shows the ETH price still has significant support clusters around the current prices.
As shown below, 8.33 million addresses had bought 9.13 million ETH at the maximum price of $1,541. Considering the large holdings, they will likely have enough in the tank to fend off the bearish pressure.
Conversely, the bears could also prevent the bulls from forcing an upswing toward $2,000. As seen above, 3.94 million addresses had bought 8.89 million ETH coins at the maximum price of $1650.
With the bearish pressure from the Ethereum foundation still in the air, they will likely prevent a major price rally.
But if the Ethereum price can scale that resistance sell-wall, it could edge closer to $2,000.
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