The cryptocurrency markets have been on a tear in 2021, with Bitcoin and Ethereum leading the way. Ethereum reached a record high of $2,000 in April, but it seems investors were given pause when the Ethereum Foundation made a $30 million Ether transfer to the Kraken cryptocurrency exchange. Could this transfer mark the top of the Ethereum market, or will the bulls hold ground and push ETH even higher?
Ethereum Foundation’s $30M ETH Transfer Triggers Temporary Price Dip, Recovery Expected
The transfer of nearly $30 million in Ether (ETH) by the Ethereum Foundation triggered a temporary 4.8% decline in the ETH price. Although the decline has been minimal so far, with the price now falling to $1,920, investors are understandably cautious of a possible selloff event.
However, the panic is uncalled for, as the current decline has been limited due to fractal analysis that shows that the Ethereum Foundation’s last three large transfers have been followed by dips in the markets. This evidence indicates that the current decline should be temporary and Ethereum prices will likely recover.
50-Day EMA and Rising Exchange Balance Support Ethereum’s Potential Price Breakthrough
The 50-day exponential moving average, which has been effective in capping the downside attempts over the last few months, has once again proven its effectiveness in limiting the potential decline as the Ether price reached a low of $1,850. There is a good chance the price will once again break through the $2,000 barrier in the coming weeks.
In addition to the 50-day EMA, Ether is also supported by a rising exchange balance, suggesting that potential selling pressure will only be minimal. In spite of the Foundation’s transfer to Kraken, the overall Ether balance across all exchanges actually dropped to 18.15 million ETH, indicating that any potential sell-pressure can be absorbed without significant damage to the current market.
Interestingly, Ethereum institutional flows have vastly outperformed Bitcoin, adding $17 million to their coffers compared with Bitcoin’s $53.1 million outflow. This could be attributed to the successful implementation of the Shapella upgrade, which could have been the primary trigger for this week’s Ethereum price appreciation.
Ethereum Foundation’s Transfer Causes Temporary Dip, but Bullish Trends and Upgrades Point to Price Increase
In summary, the Ethereum Foundation’s transfer may have caused a minor drop in the Ethereum price, but this decline should be temporary. Ether’s 50-day EMA and 200-day EMA are holding ground, and the overall Ethereum exchange balance remains higher than when the foundations announced their transfer. In light of the bullish institutional flows and the successful Shapella upgrade, Ethereum looks set to break above the $2,000 mark again. Whether this will be the final top of Ethereum or we’re still heading towards greater heights is yet to be seen.
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