- Ethereum Foundation’s smaller sell-offs (<9K ETH) show no strong correlation with price changes.
- Larger ETH sales (>15K ETH) have mixed effects on price, with no clear trend.
- Analysts advise focusing on broader market factors for Ethereum price analysis.
The Ethereum Foundation’s (EF) historical selling of its Ethereum holdings has long been a point of interest for the crypto community, with many speculating about its influence on Ethereum’s price.
However, new insights from CoinGecko are challenging this widely held belief, suggesting that these sales might not have as significant an impact on the token’s price as previously thought.
CoinGecko’s latest study examined the correlations between the EF’s ETH sell-offs and changes in Ethereum’s price over different timeframes, specifically 3-day, 7-day, and 30-day windows. The findings indicate that smaller ETH sales, those involving less than 9,000 ETH, showed no positive correlation with subsequent price declines.
Do Large Ethereum Foundation Sales Always Lead to Price Drops?
On the other hand, larger sales by the Ethereum Foundation, involving over 15,000 ETH, showed a more mixed reaction in the market. For example, a significant sale of 70,000 ETH was followed by a 20.6% drop in Ethereum’s price. However, in another instance, a 16,300 ETH sell-off actually saw ETH’s value increase by a substantial 36.5%.
The CoinGecko study further highlighted the inconsistencies between the Ethereum Foundation’s spending activities and the volatility of Ethereum’s price. While some positive correlations were observed in the short term, these were limited and not always consistent.
What Factors Really Drive Ethereum’s Price?
Traders often become cautious when they see large sell-offs of any asset, as it can be interpreted as a potential bearish signal. In this context, CoinGecko’s findings could help to alleviate some of these concerns, potentially reducing panic selling during future instances of Ethereum Foundation sales.
Despite ongoing speculation, the Ethereum Foundation has consistently stated that its ETH sales are conducted transparently and are primarily aimed at funding the continued development and growth of the Ethereum ecosystem.
Related: XRP and Solana Attract Big Money as Ethereum Bleeds $86 Million
What Should Ethereum Traders Focus On?
CoinGecko advises market participants to pay closer attention to the overall market sentiment and broader trends, rather than reacting solely to the Ethereum Foundation’s sales activity.
Looking at Ethereum’s current market position, the cryptocurrency is facing a key resistance level at $2,150. According to technical analysis, if Ethereum can successfully turn this resistance into support, it could potentially rally towards the $2,700 to $2,900 range. However, until ETH manages to break above this resistance level, it’s crucial for traders to remain cautious.
Related: Is Vitalik Cementing Sole Control Over the Ethereum Foundation?
What’s the Overall Takeaway for Ethereum Price Action?
Crypto analysts recommend that those looking to understand Ethereum’s future price movements should closely monitor trading volumes, the activity of large holders (whales), and the level of participation from institutional investors.
Disclaimer: The information presented in this article is for informational and educational purposes only. The article does not constitute financial advice or advice of any kind. Coin Edition is not responsible for any losses incurred as a result of the utilization of content, products, or services mentioned. Readers are advised to exercise caution before taking any action related to the company.
