ETH Encounters Institutional Sales: Implications on Price and Possible Market Reversal
Ethereum (ETH), the world’s second-largest cryptocurrency, is currently facing significant selling pressure from institutions and large holders amidst a bearish market phase. Notably, institutions have recently offloaded a considerable amount of ETH on exchanges, causing price declines on trading charts.
In a noteworthy development, major institutional players like Wintermute and Metalpha conducted a significant sell-off of 55,035 ETH valued at $123 million on Binance during Asian trading hours. Wintermute sold 46,947 ETH ($104.74 million), while Metalpha unloaded 8,088.8 ETH ($18.05 million) within a concise two-hour timeframe. Such actions have the potential to notably impact the price of ETH.
Several factors could have triggered this substantial sell-off, such as the prevailing bearish market sentiment, the escalating ETH reserves on exchanges, and a downward trend in Futures Open Interest spanning over three months. The accumulation of Ethereum reserves on exchanges since August 28 points towards a potential sell-off by whales, investors, or institutional participants.
Moreover, the declining Futures Open Interest on CoinGlass’s exchange implies the liquidation of long positions or the expiry of Futures contracts without new positions established. Historically, September often encounters price corrections in the cryptocurrency market before a potential resurgence in October.
Despite testing a critical support threshold at $2,140, Ethereum’s Relative Strength Index (RSI) exhibited a bullish divergence on the daily timeline, indicating a potential reversal in trend direction. Coupled with the recent support level retest, this scenario could drive ETH’s price up by 25% to 30% towards the range of $2,500 – $2,550.
On-chain metrics also present a positive outlook for ETH, with CoinGlass’s ETH Long/Short ratio reflecting bullish sentiment. Leading traders currently maintain 53.88% long positions against 46.12% short positions, with a 1.80% rise in total ETH Futures Open Interest as the cryptocurrency revisits crucial support levels.
Presently, ETH is trading around $2,280, experiencing a 2% drop in the last 24 hours but observing almost a 100% surge in trading volume, signaling intensified market activity.
In summary, the recent institutional sell-off has influenced the price of Ethereum, yet technical indicators hint at a possible market reversal towards higher price points. Traders and investors are advised to closely monitor market dynamics as ETH navigates through this volatile phase.
