Disclaimer: The opinions expressed by our writers are their own and do not represent the views of U.Today. The financial and market information provided on U.Today is intended for informational purposes only. U.Today is not liable for any financial losses incurred while trading cryptocurrencies. Conduct your own research by contacting financial experts before making any investment decisions. We believe that all content is accurate as of the date of publication, but certain offers mentioned may no longer be available.
The Ethereum Foundation has historically been a bellwether for upcoming corrections in the market landscape of Ethereum. Recently, the foundation made an unexpected move by liquidating approximately $13 million worth of Ethereum.
Ethereum, on a daily time frame, is displaying a strong uptrend characterized by consistent higher highs and higher lows. The Moving Average lines are positioned in a manner that suggests sustained bullish momentum. The 50-day MA (in blue) is above the 100-day MA (in orange), which in turn is above the 200-day MA (in black), a configuration that traditionally signals a bullish trend.
Furthermore, the price of Ethereum has been trading comfortably above these MAs, reinforcing the strength of the uptrend. A closer analysis reveals that Ethereum's price recently hit a peak, followed by a slight retracement. While such pullbacks are normal within an uptrend, they often present moments of tension as the market anticipates the next move.
The Relative Strength Index is hovering near overbought territory, indicating that the market may be due for a correction. This is where the recent operation by the Ethereum Foundation becomes particularly salient.
If we follow the history, the foundation's large transfers have been associated with preceding market downturns. While the direct correlation between the foundation's actions and market response cannot be verified with absolute certainty, seasoned investors are likely to tread with caution.
The market's reaction to the Ethereum Foundation's sell-off will be telling. Should the price sustain above the key MAs, it might indicate that the bull run still has legs. However, if the price begins to close below these MAs, particularly the 50-day MA, it could signal the onset of a larger correction.
Alex Dovbnya
