• Two wallet addresses linked to Poloniex and Genesis have turned active for the first time in five years moving 22,982 ETH worth 27.2 million.
• The Shanghai hardfork scheduled in March 2023 will also enable staking withdrawals leading to major ETH price volatility.

The crypto market came under selling pressure last week with the Ethereum (ETH) price dropping under $1,200. Now, signs of a further correction in ETH have surfaced as dormant Ethereum linked to crypto exchanges as Poloniex and Genesis have moved in the last 24 hours.

As per on-chain data, these two wallet addresses turned active for the first time in the last five years since October 2018. Together they have moved a total of 22,982 ETH worth 27.2 million.

The two new addresses where the ETH moved have a total of 13,105 ETH and 9,878 ETH, respectively. On the other hand, the old addresses just hold a value of $57.32 and $25.81. However, details are still unclear on who these ETH whales were or the reason behind initiating these transfers.

Earlier today, on-chain crypto analytics firm Loononchain also reported that the defunct crypto hedge fund Three Arrows Capital (3AC) also moved 2000 ETH worth $2.4 million from Binance. They still continue to hold ~$8 million worth of ETH on the exchange.

As said, ETH has already come under selling pressure last week after major FUD surrounding the withdrawals on crypto exchange Binance. On the other hand, accounting firm Mazars Group cut ties with Binance a week after releasing the Proof-of-Reserves audit.

Why A Mass-Selling in ETH is Possible In Early 2023?

There are some big things in the pipeline for the Ethereum ecosystem scheduled for early 2023. Around March next year, Ethereum 2.0 will enable staking withdrawals on the platform.

The Ethereum Beacon Chain started the ETH staking facility last year as so far there are 15.66 million ETH staked worth a massive $18.5 billion. As Ethereum allows staking withdrawals, this might put strong downward pressure on the ETH price going ahead. This is because some ETH stakers might consider liquidating their holdings.

The enabling of staking withdrawals on Ethereum 2.0 will happen along with the Shanghai hardfork. On-chain data provider CryptoQuant explains how the depositors and balances for Ethereum 2.0 changed. It notesnotes:

Compared to 2021, the number of depositors decreased by 57% in 2022. But the deposited balance is similar to last year. In other words, the total balance per deposit increased by 133% in 2022.

On the other hand, the ETH exchange reserves have been on a decline. CryptoQuant adds: It may be that the balance of $ETH2 increases as the $ETH exchange reserve decreases. 18M of $ETH are held on the exchange, 15% of the total supply. However, the exchange reserve is an ongoing downtrend”.

They further explain that the downtrend has been more prominent after the Merge event in September 2022. As supply and demand dynamics shift majorly with the Shanghai hardfork, we can expect major volatility in the ETH price.