What is the Reason Behind the Decline of Ethereum? Justin Sun’s Sale of $143M ETH
The cryptocurrency market is currently experiencing a bearish trend, and Ethereum has been particularly affected. Justin Sun, the founder of Tron, has been selling off his ETH holdings, causing significant ripples in the market. In the past week alone, he has sold ETH worth $143 million, which accounts for approximately half of his ETH holdings. This massive sell-off has resulted in a considerable drop in the price of Ethereum, leaving the community with many questions. Is Sun involved in some undisclosed activities? The reasons behind Ethereum’s fall go beyond a single question, and it is essential to explore the factors contributing to this situation.
One notable activity by Justin Sun is his selling and staking of ETH. Since November 10, he has deposited 108,919 ETH into HTX (formerly Huobi), with a total value of around $400 million, based on data from Spot on chain. Most of these deposits were made when ETH prices were at their peak, averaging $3,674 per ETH.
Blockchain experts have also observed that Sun has been unstaking significant amounts of ETH, including 42,904 ETH valued at $139 million from Lido Finance. Speculation suggests that he might transfer these funds to HTX as well. With such substantial activity by Sun, it is no surprise that the price of Ethereum has been struggling.
Currently, Ethereum is trading at $3,304, which represents a 17% drop since it was rejected at $4,000. In the past 24 hours alone, it has fallen by another 2.19%. Additionally, the trading volume has decreased by 8.57%.
The overall market sentiment is also bearish, with most traders taking short positions. Futures data shows that 54% of open trades are shorts, and the long-short ratio stands at 0.8495. However, there is a silver lining as 78% of Ethereum holders are still in profit at the current price.
From a technical analysis perspective, Ethereum is approaching a critical support level at $3,260. If it falls below this level, prices could potentially drop to $3,000, where the 200-day moving average may provide some stability. Nevertheless, with the Relative Strength Index (RSI) sitting at 39.28 (close to oversold territory) and the Average Directional Index (ADX) indicating bearish momentum, the outlook is not promising.
The question now is whether Ethereum can maintain its position above $3,260. If not, it could potentially drop as low as $2,800, especially if influential figures like Justin Sun continue to sell. Some analysts believe that Ethereum is currently in a “safe zone,” but others caution that low trading volumes during the weekend and uncertainty in the stock market could lead to increased volatility. Understanding the reasons behind Ethereum’s fall may have satisfied your curiosity, but for now, investors should remain cautious. Ethereum’s price fluctuations are not uncommon, but the market’s response to Justin Sun’s actions has drawn significant attention.