Recent performance data shows Ethereum [ETH] has experienced a downward trend of 18.31% over the past month. In the last 24 hours, the decline continued with a slight loss of 0.53%.
Current market indicators hint at a potential worsening of Ethereum’s downturn in the days ahead, especially after the inauguration of the incoming U.S. President, Donald Trump.
Skepticism Surrounds Investor Actions Towards ETH
World Liberty Finance, connected to the President-elect Donald Trump, recently expanded its ETH holdings through the acquisition and subsequent sale of additional tokens.
The exchange transaction involved World Liberty swapping 103 WBTC, worth $9.89 million during the trade, for 3,075 ETH.
Following the swap, they boosted their total ETH holdings to 18,536 by adding 15,461 ETH, which were then moved to the cryptocurrency platform Coinbase Prime.
Typically, when assets are transferred from private wallets to exchanges, it signals an upcoming sale. However, in this case, an immediate sell-off might not take place.
There is speculation that World Liberty Finance might keep the assets in anticipation of a surge in price after the new President’s inauguration, mirroring previous trends.
Potential market movement post-Trump’s assumption of office could resemble the significant price hike witnessed after his 2024 presidency victory.
On November 5, 2024, ETH surged by 72.70%, escalating from $2,379.30 to $4,109.00 by December 16, 2024—just 42 days later.
If historical patterns repeat, World Liberty Finance may opt to aggressively sell its ETH on Coinbase Prime following the anticipated price boom, which could impact ETH’s value negatively.
Further statistics from Intel point out that institutional investor Grayscale, recognized for its hefty ETH holdings, has been following a similar pattern by transferring its assets to Coinbase Prime.
According to the data, three transactions saw a collective 16,941 ETH worth $54.27 million moved to Coinbase Prime, indicating a bearish stance on the asset.
Diminishing Demand Signals a Shift
As per CryptoQuant’s premium index measuring institutional demand, there has been a notable decline in ETH’s fund premium, currently resting at a negative 0.515, moving further away from its neutrality.
A fall beneath the neutral mark (zero) implies diminished willingness from institutional investors to pay a premium for ETH, indicating a drop in demand and a gradually bearish stance.
Simultaneously, spot traders exhibit signs of uncertainty, opting to retain their assets on exchanges for easier selling rather than holding in private wallets for long-term investment.
This trend reflects in the exchange netflow, which transitioned from a daily net outflow of 39,270 ETH in early January to just 6,093 ETH at the current moment.
This shift suggests waning interest from both institutional and retail investors, with some steadily divesting their holdings. Nonetheless, the general sentiment remains positive regarding ETH’s bullish status.