Key Points
- Ethereum’s (ETH) price has been falling due to large investors moving their funds to other tokens.
- Grayscale’s decision to withdraw its Ether futures ETF application has caused concern among traders.
The price of Ethereum (ETH) has been dipping for the past three days, with a decrease of 7.5% so far.
The coin closed at $3,051 on Monday and dropped further to $2,999 yesterday. This decline in the second-largest cryptocurrency’s value is due to large investors shifting their funds to other tokens, causing a change in market sentiment.
Large Investors Moving Away from Ethereum
A report by LookOnChain, an on-chain data analyst, indicated that a whale named Machi Big Brother spent 661 ETH (around $2.05 million) to purchase another coin, FRIEND, at 798,157.
This isn’t the first time this investor has done so. Another large investor spent 384 ETH (approximately $1.2 million) to buy 423,196 FRIEND. This shift from ETH to another cryptocurrency suggests some investors are losing faith in Ethereum’s future.
Crypto asset management company, Grayscale, announced its decision to withdraw its application for the Ether futures exchange-traded fund (ETF) just yesterday.
This decision has caused concern among some ETH traders, as the liquidation chart on Coinglass shows traders are worried the coin’s price will decrease in the near term. Trading volume of the coin has also dropped by 17.34%.
Decrease in Trader Optimism as ETF Deadline Approaches
Traders’ optimism regarding the approval of the Ethereum exchange-traded fund has been decreasing, contributing to the coin’s price instability. Initially, anticipation of an ETF approval increased after Bitcoin ETF applications were accepted in January.
However, a poll conducted by Polymarket, a New York-based prediction market, showed that only 7% of participants believed the ETH ETF would be approved by May 31. This shows a decrease in optimism surrounding a potential ETH price increase following a potential ETF approval.
Top crypto trader and analyst, Ash Crypto, predicted the price would break out and start a journey to $15,000 by the third quarter of this year. He noted that the current price action is similar to the pattern observed in the fourth quarter of 2020.
His chart suggested that if ETH breaks out from the resistance level around $3,900, it could potentially spike by more than 300% its value and influence other altcoins. This is theoretically how an altcoin season starts, as investors gain confidence to buy other tokens when the biggest altcoin is rallying.
With Grayscale withdrawing its application before approval and some large investors considering investing their funds in different tokens, a decisive altcoin season around the key resistance of $3,900, as predicted by Ash Crypto, may take longer to arrive.
Currently, the price is fluctuating between $2,900 and $3,100, and a more decisive breakout is needed for the price to rally higher. Furthermore, the SEC must either deny or approve at least one spot Ether ETF application on May 23. Therefore, the crypto community will be closely watching the Ethereum market in anticipation of what comes next.