Lookonchain reports that the Ethereum Foundation sold 100 ETH on Wednesday. The sales continued a pattern that has been observed since January 2, 2024, with a total of 4,566 ETH sold so far.
According to past analyses by Lookonchain, the Ethereum Foundation has a history of selling ETH near market peaks, which often precede market dips. The market tracker highlighted that since the Ethereum Foundation sold 100 ETH in December last year, the price of ETH dropped by about 17%.
The #Ethereum Foundation sold 100 $ETH($336K) again 25 mins ago.#Ethereum Foundation has sold a total of 4,566 $ETH($12.96M) since Jan 2, 2024.https://t.co/DvIQFqZ96D pic.twitter.com/RBeXyPYgGP
— Lookonchain (@lookonchain) January 8, 2025
Over the past year, the foundation has reportedly sold more than $12 million worth of ETH across 32 trades, with 15 of these transactions occurring at market tops.
Ethereum Foundation sale causes market downturn
After the news of the Ethereum Foundation’s sell-offs, ETH shed 0.6% of its value in just 10 minutes. Over the last day, the second-largest crypto by market cap has seen a 7.9% downtick, now trading at $3,346 per coin, according to Coingecko data.
Medium contributor Yumi Sumiko insists the foundation is selling ETH to manage its operational expenses and to fund ongoing development and research within the Ethereum ecosystem.
Being a non-profit organization, Sumiko noted that it does not engage in these sales for profit but rather to ensure the financial sustainability of its projects.
“The foundation doesn’t just sit on its funds and watch them grow. Instead, it actively chooses to invest in Ethereum’s ecosystem, betting on the fact that this blockchain will be around for the long haul.” Sumiko reiterated.
Per TradingView’s analysis, Ethereum (ETH) is currently forming a bearish setup. The price is breaking down from a rising trendline near a resistance zone, suggesting a possible move toward a support zone near $3,061. This bearish outlook is supported by increasing selling pressure, as indicated by fundamentals.
ETH/USD trading charts. Source: TradingView
In a recent analysis published by WaveTraders, Ether is projected to experience a significant pullback. Their analysts believe ETH is currently in a bearish corrective phase of a larger corrective pattern.
This suggests that after a period of upward movement, Ethereum could be entering a phase where a deeper decline is anticipated.
Ethereum market sentiment is still bearish
Over the past few months, Ethereum has maintained a steady position above the $3,000 threshold. However, its stagnated movement has caused considerable pessimism among investors who anticipated a surge towards new all-time highs.
An analysis of the ETH funding rates, a key indicator reflecting the aggressiveness of buying or selling in the futures market, reveals telling trends. When ETH neared the $4,000 mark, funding rates soared, signaling intense buying pressure.
Ethereum funding rate history. Source: Coinglass
Interestingly, this peak was followed by a series of long liquidations, which not only corrected the price but also initiated a phase of consolidation. Funding rates have dropped to 0.052%, down from 0.093% in the last 24 hours, with liquidations totaling $140 million. Bullish positions suffered the brunt of the losses at $118 million.
Ethereum derivatives have faced a significant setback stemming from widespread crypto market liquidations, with open interest declining by 5.51% to $30.42 billion. The long-to-short ratio has shifted to a bearish 0.8968, reflecting increased pessimism among traders.
Adding to the bearish momentum, US ETH spot ETFs reported a daily net outflow of $86.79 million. Fidelity saw $67 million in liquidations, while the Grayscale Ethereum Trust recorded a $11.19 million decline as bears took hold of the market.
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