The recent sale of nearly USD 30 million worth of Ether by the Ethereum Foundation has sparked concerns about a potential selloff event and its impact on the market. However, historical evidence suggests that such sales have little influence on the overall market trend.
On May 6, the Ethereum Foundation transferred a significant amount of Ether to the Kraken cryptocurrency exchange, causing a momentary dip in ETH price, which fell 4.8% to $1,900. Nevertheless, this decline has been relatively insignificant amidst a broader recovery trend.
Following the dip, Ether’s price modestly recovered to USD 1,920 on May 7, finding support near its 50-day exponential moving average (50-day EMA). The reduced price volatility observed on Kraken during this period further indicates the calmness of traders in response to the Ethereum Foundation’s transfer.
It is worth noting that the 50-day EMA has consistently provided support for Ether throughout 2023, except for a brief dip in early March. Testing it as support has prompted the price to aim for a breakout above USD 2,000, suggesting a positive sentiment among ETH bulls.
Conversely, if the price drops below the 50-day EMA, traders may look towards a support confluence formed by a multi-month ascending trendline and the 200-day EMA (the blue wave) around USD 1,700 as the next potential downside target, representing a decline of approximately 13% from current levels.
Even in the event of a more significant decline, Ethereum would still maintain its overall recovery trend when measured from its June 2022 bottom of USD 880. This indicates a resilient market sentiment despite the recent sale by the Ethereum Foundation.