Recent on-chain activity suggests a significant response to regulatory uncertainties surrounding Ethereum, the second-largest cryptocurrency by market capitalization.
There has been a notable increase in the volume of tokens being transferred to centralized cryptocurrency exchanges. This surge is the largest recorded since September 2022, exerting a profound impact on Ethereum’s price.
Ethereum witnesses its most substantial influx onto exchanges in the past two years.
Recently, Ethereum has come under significant scrutiny. Critics within the cryptocurrency community point to its underwhelming price performance and the emergence of Solana as indicators of Ethereum’s waning influence. Additionally, regulatory bodies are reportedly scrutinizing the Ethereum Foundation, raising questions about ETH’s classification as a security.
The concerns escalated as reports surfaced about investigations by the US Securities and Exchange Commission (SEC) into entities associated with Ethereum. This negative sentiment prompted the movement of over $720 million worth of ETH into centralized exchanges during the past week, as reported by IntoTheBlock.
Significantly, SpotOnchain identified three prominent long-term ETH traders who transferred 32,527 ETH, valued at approximately $109 million, to centralized platforms in the last 24 hours. Specifically, these traders relocated 12,500, 11,600, and 8,427 ETH to Kraken and Binance.
The movement of funds to exchanges is typically interpreted as a bearish signal for the market, suggesting that holders are willing to sell their assets. Consequently, Ethereum has experienced a significant decline in its price.
According to data from BeInCrypto, the price of ETH dropped by 10% over the past week, reaching $3,371 at the time of reporting.
Lucas Outumouro, Head of Research at IntoTheBlock, pointed out Ethereum’s underperformance compared to Bitcoin and even the S&P 500. However, he underscored the enduring strength of Ethereum’s fundamentals, which continue to provide reassurance to long-term holders.
In line with this perspective, analysts at Santiment have noted a surge in transactions among Ethereum whales. Between March 19 and March 21, this group conducted 59,137 transactions exceeding $100,000. Additionally, the firm observed a notable 7% decrease in the average 30-day ETH traders, indicating the possibility of a market recovery.
Read more: Ethereum (ETH) Price Prediction for 2024, 2025, and 2030
Moreover, analysts disclosed a decline in ETH’s Relative Strength Index (RSI) to 28.5, reaching its lowest point since late January. The RSI functions as a momentum indicator to detect overbought or oversold market conditions, with readings below 30 usually suggesting oversold territory.