Key Points
- Fidelity reportedly sold a significant amount of Ethereum (ETH), contributing to the cryptocurrency’s sell pressure.
- Despite the sale, Ethereum has shown signs of recovery, with increased demand and whale buying activity.
Ethereum may be on the path to recovery following its recent rally. However, a large sale of the cryptocurrency has raised doubts.
It has been reported that Fidelity, a major financial institution, has sold a substantial amount of Ethereum.
Fidelity’s Ethereum Sale
According to a Lookonchain analysis, Fidelity transferred 64,997 Ethereum to Coinbase. This transfer, which took place on Friday, was worth over $213 million. The transfer happened after a week of bearish activity and a significant pullback for Ethereum.
The fact that the transfer was from a private wallet to an exchange suggests that Fidelity was selling its Ethereum holdings. This coincided with a day when Ethereum ETFs saw net outflows of $159.4 million. Fidelity’s own Ethereum ETF had the highest outflows, with $147.7 million leaving the fund.
Market Response and Future Outlook
Ethereum has been under sell pressure since Tuesday, a trend that continued on Friday when Fidelity made its transfer. This resulted in a 15.54% drop from the weekly high to the weekly low.
At the time of writing, Ethereum was valued at $3,308, showing a 2.89% increase in the last 16 hours. This slight recovery suggests a resurgence in demand after Friday’s close and some accumulation following the weekly dip.
Whether Ethereum can maintain this upward trend depends on the level of demand and who is buying. Onchain data shows that “whales” or large holders of the cryptocurrency have been buying the dip. Large holder inflows were recorded at 547,230 Ethereum, while outflows were 321,650 Ethereum on January 9.
This increase in whale demand could set Ethereum up for a weekend recovery. Exchange flow data also suggests a potential recovery, with outflows recently dipping to levels last seen in early November.
However, investors should be cautious of the possibility of further declines. Ethereum’s daily chart indicates the next major support level at $3,033. If demand at the current level is not maintained, Ethereum could potentially drop to this support level.
