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Vitalik Buterin And Ethereum Foundation Selling ETH – Will Prices Fall?

Ethereum supporters are confident that prices will break the $2,000 level. However, recent moves by its founder, Vitalik Buterin, and the Ethereum Foundation, the team managing the smart contracting platform, raises concerns, especially from coin holders and traders, on whether the coin has what it needs to break above key resistance levels.

ETH Transfer Raises Concerns Among Investors

On May 5, a tracker, LookOnChain, noticed that Vitalik.eth, the domain associated with Ethereum co-founder Vitalik Buterin, transferred 200 ETH, which is worth about $400,000 at current valuation, to Kraken, a cryptocurrency exchange.

Shortly after that, the Ethereum Foundation also made a much larger transfer, moving 15,000 ETH, worth about $30 million, to the same platform.

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This has raised concerns among holders, who are worried that the dumping of such a large amount of ETH could further pressure prices.

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It’s worth noting that ETH is currently down 13% from its April highs, and sliding.

Ethereum Price On May 6| Source: ETHUSDT On Binance, TradingView
Ethereum Price On May 6| Source: ETHUSDT On Binance, TradingView

Coin holders, including those of ETH, typically send tokens from time to time. Even so, any transfer to a centralized exchange is interpreted as bearish. Vitalik Buterin might need funds to cover operating costs or even invest in projects. At this time, it is not known why he sells.

In the past, Buterin has sold ETH in batches without causing a significant price drop.

Despite this development, some analysts, including Santiment, believe that ETH may be decoupling from Bitcoin, and that it might soon recover, breaking above $2,000.

According to data from Santiment, a leading on-chain data company, there has been a significant increase in the amount of Ethereum being moved to crypto exchanges over the past few months.

 

Ethereum Sees Increased Adoption

Despite these concerns, there are also positive signs, based on on-chain activity.

A record amount of ETH was burned at the end of this week, thanks to the meme coin craze, and specifically, PEPE. The majority of meme coins run on Ethereum and are being actively moved with higher gas fees, providing a great opportunity to burn ETH and decrease the circulating supply.

 

 

In addition, Ethereum is seeing increased adoption from major companies and institutions, which is driving up demand for the cryptocurrency.

Last week, the European Investment Bank (EIB) announced that it had issued its first-ever digital bond on the Ethereum blockchain, marking a significant milestone for the cryptocurrency.

The increased adoption and burning of ETH due to the meme coin mania could sustain prices above key support levels in the days ahead. Still, it remains to be seen how prices will react in the days ahead.

The sharp drop on May 6, reversing gains of May 5, could anchor the next leg down, forcing even more liquidations towards the $1,500 support line.

-Featured Image From Canva, Chart From TradingView

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