Twelve new crypto wallets collectively withdrew 156,733 Ethereum (ETH), worth approximately $574 million, from Coinbase. This transaction occurred at an average price of $3,664 per ETH.
However, despite this accumulation, the price of Ethereum has been struggling.
Will Ethereum Price Drop 7%?
According to data from the on-chain analysis platform Spot On Chain, 11 of these 12 crypto wallets withdrew about 13,059 ETH. Notably, one crypto wallet – 0xdfa, withdrew a slightly higher amount, 13,084 ETH.
Concurrently, Ethereum’s availability on crypto exchanges has decreased significantly, reaching a seven-year low, as reported by the on-chain data from Glassnode. Lark Davis, an experienced crypto investor, shed light on this trend.
“ETH supply on exchanges is at a 7-year low. Ethereum ETFs are about to cause a massive supply shock. As a result, the price of ETH could skyrocket,” Davis said.
Read more: How to Invest in Ethereum ETFs?
Mati Greenspan, founder and CEO of Quantum Economics, also commented on this situation. He noted that in the long-term trend, the amount of Ethereum on exchanges has been on a “steady slog downward for several years in a row.”
“However, large, a single day’s inflows and outflows are rarely significant for long term price action,” he added.
The crypto community is abuzz with the recent US Securities and Exchange Commission’s (SEC) approval of spot Ethereum ETFs. This development marks a crucial advancement for the crypto market. It also opens the door to potential substantial investments, reflecting the early success seen with Bitcoin ETFs.
Prominent crypto researcher Bobby Banzai predicted monthly inflows of $569 million into Ethereum ETFs. His forecast is based on the performance of international ETFs and Chicago Mercantile Exchange futures data.
Despite these positive developments and market optimism, Ethereum’s immediate price impact has been unfavorable. After the large withdrawals, Ethereum’s price has fallen over 4% from Monday’s highs, currently trading around $3,600.
Spot On Chain suggested that the fresh wallets’ transactions could be part of over-the-counter (OTC) deals, as they did not affect the market price directly.
Analysis suggests a cautious short-term outlook for Ethereum, predicting a potential 7% correction from its current market price. Since May 20, Ethereum has been consolidating between $3,624 and $3,950. Neil Liew, PR Lead at zkLink, further affirmed this outlook.
“Following the recent withdrawals and the reduced supply on the exchanges, a supply shock will most likely lead to a volatile period for Ethereum. Any news on the market could trigger exaggerated movement trends in either direction,” he told BeInCrypto.
However, ETH faced challenges this Tuesday, trading at $3,551 and possibly breaking down from the established range. If this downward trend persists, Ethereum could find its next support level around $3,302.
Read more: Ethereum (ETH) Price Prediction 2024/2025/2030
The wider crypto market is also undergoing a correction phase. In the past 24 hours, Bitcoin has declined about 3%. Meanwhile, BNB and Solana decreased by nearly 7% and 3.5%, respectively.
