This hedge fund poured over $456 million into Ethereum in a week as ETH price dipped

While Ethereum price has risen significantly this year, the token has recently suffered several periods of volatility lately, reaching a swing low at $3,675. Ethereum fear and greed index is displaying a reading of 34, indicating fear which suggests that the token may be slightly oversold. A hedge fund has taken the opportunity to buy the ETH dip, pouring over $456 million into the cryptocurrency in less than two weeks.

Hedge fund buys the Ethereum dip

Cryptocurrency hedge fund Three Arrows Capital has purchased $56 million worth of Ether earlier on December 14. Etherscan shows that the firm, founded by Su Zhu, has transferred 14,833 ETH from Binance and Coinbase to its wallet.

This is not the first time the hedge fund has purchased a large amount of Ethereum. Last week, Three Arrows Capital transferred $400 million in ETH from crypto exchanges FTX, Binance and Coinbase to its wallet. 

Crypto reporter Colin Wu first spotted the transactions and Zhu stated that he will continue to “bid hard on any panic dump,” and that purchasing 100,000 ETH is “dust,” suggesting that more purchases in Ether are yet to be made.

However, the founder of the crypto hedge fund has been involved in controversy in the crypto community, as he revealed in November that he “abandoned Ethereum despite supporting it in the past.”

His statement attracted attention from the crypto industry, and he has since softened his stance and even turned it around and said, “I love Ethereum and what it stands for.”

Speculators in the crypto market suggested that Zhu tried to create fear, uncertainty and doubt to drive Ethereum price down to buy more ETH at a lower price. 

Ethereum price struggles with major headwind at $3,900

Ethereum price has rebounded slightly after a major drop toward the swing low at $3,675 on December 13. 

ETH continues to be sealed within a symmetrical triangle but is struggling to battle with resistance at the 200 twelve-hour Simple Moving Average (SMA) at $3,900 as buyers are slowly entering the market.

An additional obstacle may appear at the 38.2% Fibonacci retracement level at $3,989, then at the 21 twelve-hour SMA at $4,112. A spike in buy orders may see Ethereum price tag the 50% retracement level at $4,139 then head toward the upper boundary of the prevailing chart pattern, coinciding with the 61.8% Fibonacci retracement level at $4,289.

ETH/USDT 12-hour chart

If Ethereum price slices above the aforementioned line of resistance, a 26% bounce toward $5,404 is on the radar.

If selling pressure increases, Ethereum price may discover immediate support at the lower boundary of the governing technical pattern at $3,712 before sliding toward the swing low at $3,675.