The Impact of Fidelity’s $213 Million Ethereum Sell-Off
Despite Ethereum (ETH) showing signs of a potential recovery in its recent rally, questions have been raised following a significant sell-off by Fidelity. Reports indicate that a wallet linked to Fidelity has transferred a substantial amount of ETH, raising concerns about the market impact.
An analysis by Lookonchain revealed that Fidelity moved 64,997 ETH to Coinbase, with the transaction amounting to over $213 million. This transfer took place amidst a bearish week for ETH, following a major pullback in its value.
Implications of Fidelity’s ETH Sale on Market Sentiment
The movement of ETH from a private wallet to an exchange implies that Fidelity is divesting its holdings. Interestingly, the sell-off coincided with a total of $159.4 million net outflows from Ethereum ETFs, with Fidelity’s FETH ETF experiencing the largest outflow of $147.7 million on that day.
ETH has been under net selling pressure since Tuesday, reaching a weekly low after a 15.54% dip from its peak. However, a recent uptick saw ETH valued at $3,308, indicating a 2.89% increase over 16 hours.
While there appears to be a slight recovery in demand post the sell-off, the sustainability of this upward trend hinges on buyer interest. Data suggests that large holders have been accumulating ETH, with inflows surpassing outflows on January 9.
Whale activity and reduced exchange flows, similar to levels seen in early November, hint at a potential weekend rally for ETH. Nonetheless, investors should remain cautious of further downside risks.
Looking at ETH’s daily chart, the $3,033 support level is crucial. Failure to attract sufficient demand at current levels could lead to a drop towards this critical level.