The ETH-BTC ratio has dropped to a 14-month low, as large token holders, including Ethereum co-founder Vitalik Buterin, moved coins to crypto exchanges, possibly as a prelude to selling. This recent price action has extended a trend that began in September 2022, confirming some bearish forecasts from analysts for the second-largest cryptocurrency by market capitalization.
Whales’ impact on the market
Market participants closely follow the on-chain maneuvers of whales, as they are considered well-informed and have a sizable impact on the market. Depositing assets to an exchange usually signals an intention to sell, while withdrawals suggest accumulation. The latest slide in price occurred as some prominent investors – also known as whales – have recently deposited a total of $60 million ETH to crypto exchanges, raising alarms about further declines in price.
Ethereum’s protocol revenues decreasing
Marcus Thielen, head of strategy and research at Matrixport, said Ethereum’s protocol revenues have been decreasing for the last three months, and expected BTC to continue outperforming the broader crypto market, including ETH. Popular crypto analyst Benjamin Cowen, founder of IntoTheCryptoverse, noted that a potential breakdown in the ETH-BTC ratio could be in the cards.
Large ETH investors moving coins to exchanges
The recent price drop has been attributed to some large ETH investors moving their coins to exchanges. Vitalik Buterin transferred 300 ETH – worth roughly $493,000 – to Kraken on Tuesday, according to blockchain data noted by security firm PeckShield. Another large holder deposited a total of 30,000 ETH – worth nearly $50 million – to crypto exchanges Binance, OKX, and KuCoin over the past four days, blockchain sleuth Lookonchain noted.
ICO participants depositing ETH
Lookonchain also pointed out that a crypto wallet that acquired tokens from Ethereum’s initial coin offering (ICO) nine years ago deposited Monday 6,000 ETH – worth just shy of $10 million – to Kraken. This entity received roughly 255,000 ETH during the ICO, now worth $423 million Lookonchain noted. Given that the token’s initial price was around 31 cents, selling the coins now at $1,650 would represent a 527,000% profit.
ETH-BTC ratio and market outlook
The recent decline in the ETH-BTC ratio has led to concerns among market participants and analysts. As the second-largest cryptocurrency by market capitalization, Ethereum’s performance has a significant influence on the overall market sentiment. With large investors moving their coins to exchanges, the possibility of further price drops cannot be ruled out.
However, it is essential to note that the cryptocurrency market is highly volatile and can be influenced by various factors, including regulatory developments, technological advancements, and market sentiment. As such, it is crucial for investors to stay informed and make decisions based on their risk appetite and investment goals.
In conclusion, the ETH-BTC ratio has reached a 14-month low, with large investors moving their coins to exchanges, possibly indicating an intention to sell. This has raised concerns about further declines in price and the potential impact on the broader cryptocurrency market. Investors should closely monitor market developments and make informed decisions based on their investment objectives and risk tolerance.
