Vitalik Butterin Sells Ethereum: Need for Panic?

Vitalik Buterin, co-founder of Ethereum, recently transferred 800 ETH, valued at approximately $2.01 million, to a multi-signature wallet.

Shortly after, the wallet converted 190 ETH to 477,000 USDC. This sparked curiosity and speculation within the crypto community about the purpose behind these moves. According to Lookonchain, a blockchain analysis platform, Buterin’s wallet, identified as “vitalik.eth,” made the transfer 40 minutes before the tweet.

The multi-signature wallet, which requires multiple signatures to authorize transactions, subsequently swapped 190 ETH for 477,000 USDC, a stablecoin pegged to the U.S. dollar.

This activity is similar to what happened earlier this month. On 9th August 2024, Buterin, who recently unveiled a new privacy-based domain, made a transaction of 3,000 ETH. It was valued at about $8.04 million, and the funds were sent to the same multi-signature wallet.

Such transactions indicate a change in Buterin’s approach to handling the Ethereum tokens. Buterin’s recent actions follow his comments concerning his ETH holdings. He has made it openly known that he only sold his Ethereum to fund his living expenses and has not done so since 2018.

However, he stated that his sales have been mainly for charitable causes or to different non-profit organizations.

How has Ethereum Responded?

Analysing data further, we find that the present price is approximately $2,510.31, 1.08% more than the previous year. It also indicates a descending resistance line tested several times and served as a solid barrier to upward moves.

The black descending line on the chart shows Ethereum’s primary resistance level. In recent attempts, the price has been unable to move above this line, indicating that bears are still in the driver’s seat.

A conspicuous feature is that there are several touches on this resistance line and no break out on the other side, suggesting that bearish pressure is still intense. Looking at the price movements of Ethereum, one can observe multiple red candles, which signify the bears’ actions.

The Ethereum price failed to rebound as it has been trying to do in the past couple of days. This is because the price met rejection at the descending resistance trendline as the bearish trend remains intact.

This is a typical bearish market pattern wherein endeavour to rise faces aggressive selling pressure. The present price level is nearly $2,510, which may be minor support. However, this support level may not hold if the bears intensify the selling pressure during the day.

A breakthrough of the $2,480 level from the bottom may result in further decline, with the next target at $2,440.

4-hour ETH/USDT Chart | Source: TradingView

In the same chart, the Average Directional Index (ADX) sits at 30.84, and other indicators can be observed from the chart, which points towards a slightly muscular trend strength. ADX value above 25 usually indicates a present trend, whether bullish or bearish.

Here, the trend stated is bearish. It supports the previous analysis that Ethereum is more likely to note downward pressure until a significant change occurs in the market. Ethereum may continue the bearish trend if it cannot break past the descending resistance line.

A decline below the current support level at $2,510 will likely propel the bears with targets at $2,440 or even lower.