Ethereum battles intense selling pressure from spike in ETH deposits to crypto exchanges
- Ethereum deposits to centralized cryptocurrency exchanges increased with sell-off driven by the ETH Foundation.
- Experts noted a spike in distributed ETH selling from market markets on Coinbase.
- ETH price has nosedived from its $2,000 peak to the $1,800 level crumbling under the rising selling pressure.
Ethereum, the second-largest asset by market capitalization is currently under intense selling pressure with the increase in ETH inflow to centralized exchanges. Typically, a rise in ETH inflow is associated with increased selling and a negative impact on the asset’s price.
Ethereum inflow to exchanges increases
Based on on-chain data from crypto intelligence tracker Santiment, there is a massive spike in Ethereum deposits to centralized cryptocurrency exchanges which signals an increases in short-term selling pressure on the asset.
Ethereum supply on exchanges
As seen in the chart above, the supply of Ether climbed to 12.87 million on May 6, from 12.53 million on April 19, 2023. In the same timeframe, ETH price declined from the $2,000 level to $1,895.
Interestingly, experts have noticed a spike in selling pressure on Coinbase, one of the largest centralized exchanges and the Ethereum Foundation transferred $30 million worth of Ether to collectively sell.
Andrew Kang, crypto influencer and trader believes when the Ethereum foundation transferred $30 million worth of ETH to exchanges, the rest of the market participants collectively sold or shorted $1 billion worth of ETH in response.
The expert presented his thesis on Ethereum in a recent tweet:
ETH Foundation transferred $30m to exchange and the rest of us/the market probably collectively sold/shorted $1B+ in response https://t.co/7j6g3ONKPz
— Andrew Kang (@Rewkang) May 6, 2023
Market makers engage in ETH distribution, increasing selling pressure
Analysts at @52kskew believe that Ethereum price needs to climb to the $1,900 level and sustain above that to tackle the selling pressure on the altcoin.
$ETH Spot CVD Buckets & Delta Orders
— Skew Δ (@52kskew) May 7, 2023
Pretty clear distributive selling from MMs in the past day into thick liquidity.
Coinbase as expected were the major ETH sellers "ETH Foundation"
if ETH can hold $1900, would say that's a some relative strength considering this kind of… pic.twitter.com/UWGGj1mGsY
Experts consider the $1,933 a key level for Ethereum, however believe that the altcoin needs to show strength to begin its recovery.
The altcoin’s price recently declined to the $1,800 level, with the increased supply on exchanges and distribution by the Ethereum Foundation and market makers. It remains to be seen whether ETH recovers from the recent pullback in its price.
Author
Ekta Mourya
FXStreet
Ekta Mourya has extensive experience in fundamental and on-chain analysis, particularly focused on impact of macroeconomics and central bank policies on cryptocurrencies.
