Key Points
- World Liberty Finance and Grayscale have moved a significant amount of their Ethereum holdings to exchanges, indicating a potential sell-off.
- Ethereum’s investor activity has slowed down, with the funding premium turning negative as demand decreases.
World Liberty Finance and Grayscale, two significant institutions, have shifted a large amount of their Ethereum (ETH) holdings to exchanges. This move suggests a possible sell-off in the near future.
Ethereum’s investor activity has been stagnant recently. The funding premium has turned negative, indicating a drop in demand.
Ethereum’s Recent Performance
Over the past month, Ethereum has underperformed, dropping by 18.31%. This bearish trend continued over the last 24 hours, with a slight loss of 0.53%.
The current market trends suggest that Ethereum’s decline may intensify in the coming days, especially following the inauguration of the new U.S. president, Donald Trump.
Investor Movements
World Liberty Finance, associated with President-elect Donald Trump, recently increased its ETH holdings by acquiring more tokens, only to sell them off later.
This transaction involved World Liberty swapping 103 WBTC, valued at $9.89 million at the time of the exchange, for 3,075 ETH.
After the swap, they added 15,461 ETH to their holdings, bringing their total to 18,536 ETH, which was then deposited on the cryptocurrency exchange Coinbase Prime.
Usually, when assets move from private wallets to exchanges, it signals a potential sell-off. However, in this case, the sell-off may not occur immediately.
World Liberty Finance may be holding the assets in anticipation of a price surge following the upcoming inauguration of President-elect Trump, as seen in the past.
If history repeats itself, World Liberty Finance may aggressively sell off its ETH on Coinbase Prime after the anticipated price surge, potentially driving ETH’s price down.
Additional data from Intel reveals that institutional investor Grayscale, known for its large ETH holdings, has followed a similar pattern, moving its assets to Coinbase Prime.
According to the data, three transactions saw a total of 16,941 ETH moved to Coinbase Prime, valued at $54.27 million at the time, signaling a bearish stance on the asset.
Decline in Demand
CryptoQuant’s premium index, which measures institutional demand for an asset, has shown a significant drop in ETH’s fund premium. It now trades at a negative 0.515, moving further away from its neutral zone.
A drop below the neutral zone (zero) indicates that institutional investors are less willing to pay a premium for ETH, suggesting a decline in demand and a gradually bearish outlook.
Simultaneously, spot traders are showing signs of uncertainty. These traders now prefer to hold their assets on exchanges, where they can easily sell, rather than in private wallets for long-term holding.
This behavior is reflected in the exchange netflow, which shifted from a daily netflow of negative 39,270 ETH in early January to just 6,093 ETH, at the time of writing.
This sentiment suggests that both institutional and retail investors are losing interest, with some gradually selling off their positions. However, the overall sentiment remains that ETH is still viewed as a bullish asset.
