The Ethereum Foundation has been on an aggressive selling spree lately, raising concerns about over-dumping. The foundation currently holds over $215 million worth of $ETH.
As previously reported by AMBCrypto, on 24 April, the foundation completed a sale of 10,000 $ETH worth $23.8 million. After a period of selling though, the team seems to have shifted strategy and is now turning to staked holdings.
In fact, according to Arkham data, the foundation has begin unstaking its stack, withdrawing $48.9 million in $ETH. They deposited wstETH to the Lido unstETH contract to receive unstaked $ETH.
This is the first unstaking since the foundation staked 22,517 $ETH, worth $46 million, in early March, signaling a shift in market strategy. Despite the unstaking and recent $AAVE crisis, $ETH staking services remain increasingly popular though.
Currently, 39.2 million $ETH or 31.5% of the total supply is staked, with 23% staked through LIDO. With the number of stakers and the amount staked still holding steady, this is evidence that most market players trust the services.
Especially now that the market is struggling to make any meaningful gains, earning yield is becoming another source of revenue.
Ethereum market demand remains steady
Interestingly, although the Ethereum Foundation has been selling, it has avoided using public exchanges to minimize pressure. In fact, the team has used OTC sales, with the latest sale being no exception.
As a result of the approach, the market has seen little pressure, especially from rising supply on exchanges. On the contrary, supply has continued to decline on the charts.
The Exchange Supply Ratio plummeted to 0.122 too – The lowest level since 2016. A declining ESR means that demand has been strong, with buyers effectively absorbing the hike in selling pressure.
What do momentum indicators suggest?
With $ETH flashing signs of sustained demand despite the recent crisis involving $ETH depositors on $AAVE, the momentum has been bullish.
For starters, the altcoin’s Relative Strength Index (RSI) was holding above 50 at 55 at press time. Although the RSI formed a bearish crossover, it was still edging into the bullish zone – A sign that buyers may be active and effectively countering sellers.
At the same time, the Momentum Shift indicator has remained positive throughout April, hinting at strong market demand. Often, when these indicators are set this way, they mean buyers are active and trying to push the prices up.
Thus, if bulls manage to hold onto the market despite recent concerns, $ETH will make further gains on its price charts. In doing so, $ETH will flip $2.4K and eye a move above $2.5K.
However, the Foundation’s sustained selling spree could affect this market structure. For instance, on 11 April, when they sold, $ETH dropped from $2.3K to $2.1K. Thus, if this trend persists, $ETH could breach the $2.3K support to $2,250.
Final Summary
- Ethereum Foundation unstaked $48.9 million in $ETH, raising further concerns about potential selling pressure.
- Ethereum [$ETH] supply on exchanges fell to 2016 levels, reflecting strong market demand despite the recent staking crisis.
