Ethereum sell-off fears rise as crypto hedge fund moves $60 million worth of ETH to exchange

Ethereum’s native token Ether ( ETH ) rose more than 5% to hit its intraday high above $1,930 on May 30. Nevertheless, the ETH/USD pair ...

Ethereum’s native token Ether (ETH) rose more than 5% to hit its intraday high above $1,930 on May 30. Nevertheless, the ETH/USD pair is likely to face another selling cycle due to concerns about a massive influx of ETH into an exchange.

58.7K Ether transferred to FTX in May

On May 30, the Ether address allegedly associated with Three Arrow Capital – a Singapore-based crypto hedge fund, sent 32,000 ETH worth $60 million to the FTX crypto exchange in the space of a hour, string the data show.

The bulk transfer, which follows the fund’s 26,700 ETH deposit on the same exchange earlier in May, raised suspicions that it would empty the Ether reserve. This is mainly because, in theory, investors transfer crypto to their exchange wallets only when they want to sell it for other assets.

Nonetheless, the number of Ether held by exchanges continued to decline in May, according to on-chain data tracked by Glassnode.

The ETH balance on all crypto exchanges rose from 20.45 million to 20.38 million since the beginning of the month (MTD), underlining that investors are holding on to their investments for the long term.

Ethereum balance on exchanges. Source: Glassnode

ETH rebound weakens

The massive transfer of Ether from Three Arrow to FTX coincides with ETH testing a critical support-turned-resistance level near $1,920 for a breakout, as shown below.

Four-hour ETH/USD price chart. Source: Trading View

Simultaneously, Ether’s Relative Strength Index is close to its “overbought” threshold of 70, which, as a rule, tends to precede a sell-off. In other words, ETH could consolidate around $1,920 in the coming days before returning to its rising trendline support near $1,850.

Related: ‘Mega bullish signal’ or ‘true breakdown?’ 5 things to know about Bitcoin this week

Conversely, a decisive move above the $1,920 level, accompanied by an increase in trading volumes, could trigger a long-term bullish setup shared by “Wolf”, a pseudonymous market analyst, as noted. below.

ETH/USD weekly price chart. Source: Wolf/TradingView

The pattern presents the levels around $1,820 as support in a so-called accumulation range, with $4,000 serving as resistance at the other end. Wolf noted that the price could soar towards $4,000 “a few months after the merger,” a highly anticipated upgrade that would make Ethereum a proof-of-stake protocol.

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