Is Vitalik Buterin’s $10M Ethereum Sale Bad News for ETH Bulls?

According to data tracked by Lookonchain, Ethereum co-founder Vitalik Buterin transferred around $10 million of his Ethereum holdings to a wallet associated with a cryptocurrency exchange in August.

Additionally, according to Arkham Intelligence data, Buterin’s Ether address has seen around 422,000 ETH (worth $1.04 billion as of September 1, 2024) drained since 2015. Over the past two years, over 840,000 ETH have left the address.

The move has led to speculation that Buterin is selling his ETH holdings to take profits on Ethereum, especially since the cryptocurrency is trading 180% higher than its 2022 cycle low of $885.

However, Buterin denies these claims.

I haven’t sold ETH for profit since 2018. — Buterin

On August 31, Buterin stated that he had never sold any of his Ether holdings for profit, and that all of his ETH transfers since 2018 had been to support various projects that he deemed valuable within the “Ethereum ecosystem or broader charity.”

What’s interesting is that the August transfer coincides with a move of 84,000 ETH (equivalent to $270 million) from an official Ethereum Foundation address to a cryptocurrency exchange.

The Ethereum Foundation periodically sells a portion of its ETH holdings to fund development, research, and other initiatives important to the ecosystem.

relevant: Vitalik Buterin analyzes Ethereum Foundation spending in 2023.

However, large Ether transfers may cause short-term market reactions as investors interpret this as selling pressure.

For example, in November 2021, the Ethereum Foundation transferred 20,000 ETH (worth approximately $95 million) to Kraken.

This transfer occurred just before the ETH price peaked, and the price subsequently fell by 85%, showing that the Ethereum Foundation’s unintentional sale of its ETH holdings contributed to the ETH market decline.

Similarly, in May 2021, the Ethereum Foundation sold 350,000 ETH, which caused the Ethereum market to drop by 50%.

Buterin, Will Ether Price Fall After EF’s ETH Sale?

Not all Ethereum Foundation sell-offs precede major market corrections.

For example, the sale of 100,000 ETH in December 2020 was before the 630% price rally. Other factors that contributed to the Ether price surge were the launch of the Beacon chain, which indicates that Ethereum has switched to proof-of-stake, and the loose monetary policy of the US Federal Reserve, which has increased the demand for risky assets, including cryptocurrencies.

What’s interesting is that the recent ETH sell-off by Vitalik Buterin and the Ethereum Foundation comes at a time when the Federal Reserve is looking to cut rates and outflows from spot Ethereum exchange-traded funds (ETFs) are slowing.

From a technical perspective, Ether is trading within a range defined by the 50-week (red) and 200-week (blue) exponential moving averages (EMA).

The recent decline from the 50-week EMA increases the likelihood that the price will hit the 200-week EMA (around $2,000) by October, which would represent a decline of around 15% from current price levels.

The 200-week EMA also coincides with the lower trendline of Ether’s multi-year ascending triangle pattern. This support confluence increases the likelihood of a sharp rebound, leading to Ether retesting the triangle’s upper trendline (around $4,000) by late 2024 or early 2025.

This article does not contain any investment advice or recommendations. All investment and trading moves involve risk, and readers should conduct their own research when making decisions.