• Buterin has sold ETH severally this year together with the Ethereum Foundation.
• The core developer has also dumped part of his altcoins holdings in the recent past.

The Ethereum (ETH) market is on the verge of entering a fresh bearish trend after experiencing significant resistance of around $2,131. The second most valuable digital asset by market capitalization after Bitcoin has recorded increased sell-off pressure after the Shanghai upgrade enabled withdrawals of staked ethers.

Additionally, the rise of new meme coins has increased cash outflows from large-cap to low-cap altcoins. According to a recent report by CoinShares, Ethereum investment products recorded an outflow of about $2.3 million in the past week. 

As the Bitcoin market threatens to drop below $26k towards $24k through a head and shoulder candlestick pattern, the Ethereum bulls are also struggling to hold the current support levels. 

Staking Effects

The narrative of an Ethereum capitulation has significantly intensified after the Shanghai upgrade that enabled the withdrawal of more than 18 million ethers. Moreover, the United States SEC has forced several CEX staking programs to cease operations amid claims of unregulated securities. Additionally, there were collapsed and struggling crypto firms that eagerly awaited the Shanghai upgrade to access more liquidity.

Nevertheless, the withdrawal process is slow to ensure the network security status does not collapse immediately.

Is Ethereum Sell-off Imminent?

According to a recent on-chain analysis by Lookonchain, a crypto analytics platform, Ethereum’s core developer Vitalik Buterin has transferred a total of 17,800 $ETH worth approximately $33 million YTD. The latest transfer by Vitalik was in the past 24 hours after he moved about 3,500 ETH worth approximately $6.56 million to a different wallet.

Notably, Vitalik has been on a selling spree since the year began. In the first week of March 2023, Lookonchain spotted several altcoins transactions associated with Vitalik. On-chain data further shows Vitalik and the Ethereum Foundation dumped more than 15k Ethers via Kraken during the same time in March.

As a long-term Ethereum holder, their on-chain activities are closely followed to determine the overall market sentiment. As the cryptocurrency market begins to signal increased bearish sentiments, increased sales from Ethereum Foundation and Vitalik are an indicator the industry could dump further soon.

Market Outlook

As the king of smart contracts, the Ethereum ecosystem is significantly bolstered by the greater ERC-20 market. Moreover, the Ethereum total value locked (TVL) has held more than $27 billion despite the Shapella upgrade enabling the withdrawal of staked ether. The astronomical growth of decentralized financial ecosystems (DeFi) has enabled the Ethereum ecosystem to maintain its cryptocurrency dominance which stands at around 18.6 percent.

Price Action

Having bounced off the 2017/2018 highs of around $1,421, the Ethereum price is likely to retest the same levels as support. In this regard, the asset is likely to consolidate horizontally before Bitcoin halving next year triggers a fresh bull market. In the short term, a revisit of the post-Shanghai tops is likely if the bulls hold the current levels as support.

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