Ethereum, a prominent cryptocurrency, is experiencing increasing sell-off pressure following a major move by financial behemoth, Fidelity. Over the past two days, Fidelity transferred over $200 million of Ethereum to the digital currency exchange, Coinbase.
This large-scale transfer of funds has initiated widespread concern that the already declining value of Ethereum may plummet further. The worry is that the sudden surge of Ethereum coins into the exchange market could potentially intensify downward pressure on the cryptocurrency’s price.
Details of these transfers were completed in a succession of transactions over a forty-eight-hour period. Fidelity’s crypto assets were transported to Coinbase using Cumberland. According to the data sourcing platform, Arkham, the initial two transactions involved transferring 20,000 Ethereum coins to Coinbase completed on January 8. A final transaction ended on the following Thursday with an additional deposit of 11,250 coins, equating to $36.51 million.
These transfers have led to an upswing in Ethereum’s exchange inflow volume. Data platform, Glassnode, reported that on January 9 over 550,930 units of Ethereum, valued at more than $1 billion, were sent to exchange addresses. This represents the highest single-day inflow since December 20.
When an asset’s exchange inflow escalates, it signifies amplified selling pressure as holders transport assets to exchanges, perhaps for liquidation. If sell orders surpass demand, this trend can lead to a drop in price. Current readings from the Ethereum to US dollar daily chart indicate weak demand in the altcoin market to soak up the growing supply. Likewise, Ethereum’s falling Relative Strength Index (RSI) mirrors this decline in buying power, leading to speculations that the coin might drop to around $3,027. However, if the exchange inflow slows and the demand surges, Ethereum’s price could scale back up to $3,758.1.