Are Vitalik Buterin’s $10M Ethereum sales bad news for ETH bulls?

Ethereum co-founder Vitalik Buterin transferred about $10 million worth of his Ether (ETH) holdings to wallets associated with crypto exchanges in August, according to data tracked by Lookonchain.

Additionally, Arkham Intelligence data shows Buterin’s Ether address has witnessed outflows of around 422,000 ETH (worth $1.04 billion as of Sept. 1, 2024) since 2015. Over 840,000 ETH have moved out of the address in the last two years.

The transfers led to speculation that Buterin has been selling his Ether holdings to realize Ether profits, especially as the cryptocurrency is trading 180% higher compared to its cycle low of $885 in 2022.

Nonetheless, Buterin denies these allegations.

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

On Aug. 31, Buterin clarified that he has never sold his Ether holdings to realize profits, noting that all of his ETH transfers since 2018 have been about supporting various projects that he thinks are valuable, either within “the Ethereum ecosystem or broader charity.”

Interestingly, the August transfers coincide with the movement of 84,000 ETH worth over $207 million from the official Ethereum Foundation address to crypto exchanges.

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

Related: Vitalik Buterin breaks down 2023 Ethereum Foundation spending

However, large Ether transfers can sometimes cause short-term market reactions, as investors might interpret this as incoming selling pressure.

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

The transfers occurred just before Ether price peaked, followed by an 85% correction in its price, indicating that the Ethereum Foundation’s sales of its Ether holdings—irrespective of their intentions—contributed to the ETH market declines.

Similarly, in May 2021, the Ethereum Foundation sold 350,000 ETH, which preceded a 50% price decline in Ether markets.

Will Ether price drop after Buterin, EF’s ETH sales?

Not all Ethereum Foundation sales have preceded major market corrections.

For instance, its sales of 100,000 ETH in December 2020 came before a 630% price rally. Additional factors behind the Ether price surge were the launch of the Beacon chain, which marked Ethereum’s shift toward proof-of-stake, and the loose Federal Reserve monetary policy in the United States that boosted demand for risk-assets, including cryptocurrencies.

Interestingly, Vitalik Buterin and the Ethereum Foundation’s recent Ether sales occur at a time when the Fed is planning to cut interest rates and outflows from spot Ethereum exchange-traded funds (ETF) are slowing down.

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

Its recent pullback from the 50-week EMA increases the odds of the price hitting the 200-week EMA—at around $2,000—by October, down about 15% from the current price levels.

The 200-week EMA further coincides with the lower trendline of Ether’s multi-year ascending triangle pattern. This support confluence increases the odds of a sharp rebound, prompting Ether to retest the triangle’s upper trendline—at around $4,000—by 2024’s end or early 2025.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.