ETH Dips 8.8% as Ethereum Foundation’s Sell-Offs Pile Up

• Ethereum is sent back below $2,500 amid a market-wide crypto drawdown.
• Ether ETFs count nine consecutive days of outflows, adding sell pressure.
• Crypto analysts mark entry points upon bigger price drop expectations.

As the crypto sector faces a whirlwind of long position liquidations this Wednesday, all major-cap digital assets plunged. As Bitcoin (BTC) swiftly slumped below $60K after a week of staying above this key trendline, the second-largest blockchain dumped even harder, claiming a new monthly low.

Ethereum Foundation Top?

Ethereum’s native Ether (ETH) hit the lowest point in seven days at $2,409.42 shortly before bouncing back above the $2,500 support territory. Wednesday’s 8.8% price plunge for ETH comes just five days after the Ethereum Foundation completed their latest batch of ETH deposits to Kraken .

Five days ago, the Ethereum Foundation shuffled 35K Ether to Kraken’s exchange, valued at $94.07 million at stamped transaction time. Collectively, since the start of the year, the Ethereum Foundation has sold off 239K tokens for a whopping $654 million, according to blockchain intelligence firm LookOnChain.

This raises the question of whether Ethereum has reached its cycle top, as previous Ethereum sell-offs by the non-profit organization have been identified as “near the top,” according to the firm’s analysts. Upon further research by DailyCoin, it was established that the foundation still holds 273.541K tokens, currently valued at $692 million.

Did Ethereum Really Hit the Bottom?

As Ether ETFs have now recorded nine consecutive days in the red, crypto fans await the largest Proof of Stake blockchain’s next move. According to observations by Santiment, a social blockchain analytics firm, August 25, 2024, was the perfect setup for a market-wide plunge.

Intriguingly, Santiment reported the highest greed on Derivatives markets since Bitcoin’s all-time high in March 2024. Taking the dYdX decentralized exchange as an example, Santiment noticed unusually high funding rates, which could have heavily influenced the ongoing market dip.

As Ethereum hovers around the psychological price barrier of $2,500, the funding rate has dropped to negative levels, while $66.25 million in long liquidations have occurred in the latest 24-hour period.

While this is still far less than the $211 million in long liquidations on August 5, 2024, the concerning trend has several veteran traders waiting for lower entry points.

To illustrate, a pseudonymous popular crypto analyst, Unknown Trader, has marked $2,172.35 – $2,085.44 as their nearest desirable entry point. Ethereum could retrace back to early December 2023 levels if that would be the case.

While most key on-chain signals remain neutral at publication, pivotal technical instruments such as the Awesome Oscillator (AO) and the Chaikin Money Flow (CMF) remain heavily in negative territory, signaling a continuous distribution phase among large ETH holders.

On the Flipside

• Despite the current dip, 64% of Ethereum holders are still profiting from this ETH price range.
• Ethereum is tacking on bullish momentum on Derivatives, as daily volume has soared by 50.8%.

Why This Matters

Ethereum’s adoption in traditional finance via ETF products opened up a bigger clientele for the largest Proof of Stake blockchain. However, Ethereum is still prone to price fluctuations if large due to heavy sales by large players.

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