Large quantities of Ethereum traded by Galaxy Digital causes concern: $42 million transaction triggers alarm bells
Jump In: Galaxy Digital's Ethereum Deposit Creates Waves Amid Market Uncertainty
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Galaxy Digital's OTC wallets have dumped a hefty 23,900 ETH ($42.52 million) into Coinbase, giving rise to concerns over temporary selling pressure.
Crypto caution runs high as Ethereum makes a recovery but this move raises eyebrows.
Ethereum's Volatile Road Ahead
Following the deposit, Ethereum is trading at $1,832.58, up 1.17%. But concerns about short-term selling persist, challenging the strength of its rebound.
Large holder netflows have risen dramatically, adding to the apprehension. As’ante at Coinbase, but Ethereum's supply on exchanges has dropped to 8.23M ETH — the lowest it's been for quite some time. This suggests that most holders prefer self-custody or staking over liquidation, but sudden OTC activity can cause short-term volatility.
Busting Through Barriers
Ethereum has managed to shatter a falling wedge pattern, typically synonymous with bullish reversals. This breakout pushes past the $1,800 barrier, with $1,830 now acting as immediate support. Resistance is strong around $1,850, and a decisive move above this ceiling could pave the way for voyages toward $2,200 and $2,400 ambitions. But if Ethereum fails to uphold $1,830, a revisit to support levels around $1,670 might be inevitable.
Ready, Steady, But Not All That Aggressive
Derivatives data reveals a spike in speculative interest. ETH's perpetual trading volume surged 48.61% to $44.67B, while Open Interest climbed 1.74% to $21.01B. Options markets followed suit, with volumes up 35.71%. However, Funding Rates on Binance stayed subdued at +0.008%, suggesting that although leverage has escalated, traders are proceeding with caution. This careful approach indicates that conviction is under development but isn't yet overwhelming.
The Great Accumulation Continues Amidst Whale Activity
On-chain measurements point to a continued accumulation phase. The MVRV Z-score stands at -0.67, hinting that most ETH holders are underwater, a historically accumulation-friendly scenario. Furthermore, the neutral Funding Rate echoes low-risk sentiment among derivatives traders, indicating limited profit-taking in spite of whale deposits.
In summary, despite Galaxy Digital's deposit, Ethereum's recovery continues, but apprehension reigns. Exchange supply is low, on-chain metrics suggest continued accumulation, and Ethereum's ability to hold $1,950 as support could determine whether it can regain bullish momentum or succumb to another correction.
Extra Info:
- Sell-Off Concerns: This deposit from Galaxy Digital could trigger a sell-off, considering that large investments to exchanges often indicate an intention to sell.
- Market Resilience: Despite the sell-off concerns, Ethereum's ability to hold its current price levels is a signal of market resilience.
- Potential Market Dynamics: A substantial sell-off could impact the broader crypto market, as institutional actions often influence market sentiment.
- Galaxy Digital's deposit of 23,900 ETH into Coinbase could signal temporary selling pressure, causing sell-off concerns.
- The Ethereum wallet which belongs to Galaxy Digital, has transferred a significant amount of ETH to Coinbase, leading to a possible sell-off.
- The current recovery of Ethereum is facing some resistance due to the increased exchange activity of Ethereum from Galaxy Digital's wallet.
- As Ethereum's exchange supply drops to a record low, holders are preferring self-custody or staking over liquidation, despite the deposit from Galaxy Digital's wallet.
- The spike in Ethereum's perpetual trading volume and Open Interest, as well as options markets, indicates a cautious approach and a developing conviction among traders.
- The continued accumulation phase of Ethereum is highlighted by a MVRV Z-score of -0.67, suggesting that most ETH holders are underwater, creating a historically accumulation-friendly scenario.
- The neutral Funding Rate in derivatives markets indicates limited profit-taking, despite whale deposits, signaling a market resilience amidst the uncertainty caused by Galaxy Digital's deposit.
