Ethereum [ETH] is on the verge of a potential recovery after a recent rally, but a significant sale has raised concerns about its future trajectory. Fidelity, a major player in the cryptocurrency market, reportedly offloaded a substantial amount of ETH, adding to the sell pressure on the digital asset.
According to a recent analysis by Lookonchain, Fidelity transferred 64,997 ETH to Coinbase, amounting to over $213 million. This transfer took place during a bearish week for ETH, following a major pullback in the market. The move from a private wallet to an exchange indicates that Fidelity is divesting its ETH holdings, coinciding with a day when Ethereum ETFs recorded significant net outflows.
The sale by Fidelity and the overall market sentiment have contributed to a 15.54% dip in ETH’s price from its weekly high to a low. However, there are signs of a short-term bullish relief as ETH saw a 2.89% uptick in the last 16 hours, reaching $3,308 at press time. This slight recovery suggests renewed demand after the recent sell-off.
Whale activity in the market also indicates a potential weekend recovery for ETH. Large holders have been accumulating ETH, with inflows surpassing outflows on January 9. Additionally, exchange flows have decreased to levels not seen since early November, hinting at a possible resurgence in demand for ETH.
While the data points towards a recovery rally for ETH, investors should remain cautious as the digital asset faces a critical support level at $3,033. Failure to attract sufficient demand could lead to further downside for ETH, potentially testing the support level.
In summary, Ethereum’s recent price movements have been influenced by Fidelity’s sale and overall market sentiment. Despite the sell pressure, there are indications of a short-term bullish relief for ETH, with whale activity and exchange flows pointing towards a potential recovery. However, investors should monitor the $3,033 support level closely to gauge ETH’s future direction.