Why Ethereum’s rise to $3K was short-lived

  • Ethereum’s price faced uncertainty as a dormant ICO participant began to move holdings.
  • NFT trades occurring on the network declined.

On the 20th of February, following Ethereum’s [ETH] price surpassing $3,000, an ICO participant, who was dormant for 8.6 years, deposited 1,732 ETH, which amounted to $5.15 million on Kraken at press time.

The participant received 3,465 ETH, around $10.3 million at Ethereum’s Genesis, with the ICO price at approximately $0.31.

Screenshot 2024 02 21 at 12.38.58 PM

Source: X

This sudden movement could potentially impact the price dynamics of Ethereum negatively. It might introduce additional liquidity into the market, potentially influencing market sentiment.

On the positive side, the participant’s return and deposit could be interpreted as a sign of confidence in Ethereum’s current price levels.

It might attract the attention of other investors who perceive the market as favorable.

However, there could be concerns about potential sell-offs or profit-taking strategies by long-term holders, especially if the participant decides to liquidate a portion of the deposited ETH.

This could also contribute to short-term selling pressure, impacting the price temporarily.

How is ETH doing?

At press time, ETH had slipped below the $3,000 mark, with its price trading at $2,936.98. In the last 24 hours, the king of altcoins’ price had declined by 0.26%.

Despite the recent correction, the total number of addresses holding ETH had grown. This suggested that the overall interest in ETH was on the rise.

However, this rising number did not seem to particularly help ETH’s case.

Ethereum ETH 13.14.07 21 Feb 2024

Source: Santiment

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The number of NFT trades occurring on the Ethereum network had also declined significantly at the time of the report. This could change overall sentiment negatively.

The drop in NFT trades may have been brought on by addresses opting for alternative networks with lower gas fees, which remains a sore point for the network till date.

Ethereum ETH 13.30.07 21 Feb 2024

Source: Santiment

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