8 months ago
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The ongoing selloff witnessed in the Ethereum (ETH) market appears not to be stopping soon as huge VC withdrawals have been spotted.
Lookonchain, an on-chain crypto analytics platform, revealed that Fenbushi Capital and Galaxy Digital, two prominent Venture Capital firms withdrew ETH from the Binance crypto exchange. According to the transaction details, Fenbushi Capital withdrew 5,207.4 ETH worth approximately $17.2 million, while Galaxy Digital withdrew 6,000 ETH valued at about $19.8 million.
Both Fenbushi Capital and Galaxy Digital withdrew $ETH from #Binance after the market dropped.
Fenbushi Capital withdrew 5,207.4 $ETH($17.2M) from #Binance 11 hours ago.
Galaxy Digital withdrew 6,000 $ETH($19.8M) from #Binance 4 hours ago.
Address:https://t.co/wJDIeJ6o97… pic.twitter.com/gDQBKMIK96
— Lookonchain (@lookonchain) April 3, 2024
The timing of these withdrawals is particularly notable as it coincides with a current drop in the price of Ethereum. Looking at data from CoinMarketCap, the cryptocurrency is currently trading at $3,315, down by 7.25% in the past 7 days. The market capitalization has also dropped by 0.29% to $398 billion within the last 24 hours.
The consecutive withdrawals by Fenbushi Capital and Galaxy Digital have aroused discussions regarding a potential selloff of Ethereum and its implications for the market. However, It is important to note that withdrawals don’t always result in instant selling pressure.
The actions of the VC firms could also indicate smart investment strategies. It is possible that both Fenbushi Capital and Galaxy Digital may be withdrawing their ETH deposits to store them in more secure storage solutions, such as hardware or cold wallets.
Another possibility is that both firms are strategically deploying their withdrawn funds into Decentralized Finance (DeFi) protocols or staking programs. By actively participating in these schemes, these companies may be attempting to maximize their Ethereum holdings and earn additional income.
In a recent achievement, the Ethereum network now has 1 million validators. In total, the validators have staked 32 million ETH, which is worth approximately $114 billion at current market rates.
Factors Contributing to Ethereum’s Price Dip
Ethereum’s recent price decline follows sharply on the recent downturn in the crypto market. Bitcoin (BTC), the biggest digital asset has seen its price plummet from around $70,000 in the past week to $66,051, marking a decline of approximately 6%.
In a recent post on the X social media platform, crypto expert, Ali Martnez stated that Bitcoin’s TD Sequential indicator flashed a sell signal, indicating a probable correction. Ali forecasts a fall lasting one to four weekly candlesticks, implying that the bearish trend may continue for a few more weeks.
The TD Sequential indicator presents a sell signal on the #Bitcoin weekly chart, anticipating a one to four weekly candlesticks correction! pic.twitter.com/51JY2ADTYb
— Ali (@ali_charts) April 1, 2024
Regarding Ethereum’s bearish performance, Ali stated that the coin lacks support at $3,460, increasing its likelihood of a correction to $2,850 or below.
Another key factor that may be contributing to Ethereum’s price decline is the uncertainty regarding the launch of an Exchange-Traded Fund (Fund). Bloomberg’s ETF analyst, Eric Balchunas noted that the probability of an ETH ETF being launched in May remains dismal at 25%. He highlighted that the US Securities and Exchange Commission has been silent in communicating with ETF applicants, a development that solidifies the approval odds thesis.
