Ethereum could witness a price dip as whales take profit

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Ethereum (ETH) faces pos­si­ble sell pres­sure, one cryp­to ana­lyst says, cit­ing how it sur­passed the $2,300 mark. Whales have been active­ly tak­ing prof­it, and this could trig­ger a mas­sive sell pres­sure on the world’s sec­ond-largest crypto. 

Ethereum price volatility 

The price of Ethereum (ETH) has been pos­i­tive­ly impact­ed by the recent bull­ish momen­tum in the glob­al cryp­to mar­kets, fueled by Bitcoin’s (BTC) surge above the $43,000 price region.

ETH main­tains a dis­tinc­tive mar­ket posi­tion attrib­uted to its exten­sive devel­op­er com­mu­ni­ty, wide­spread adop­tion, and piv­otal role in decen­tral­ized finance (defi) and var­i­ous blockchain applications.

Despite the cur­rent pos­i­tive momen­tum, there are appre­hen­sions regard­ing the poten­tial influ­ence of sell­ing pres­sure from whales on the cryptocurrency’s price. 

Accord­ing to cryp­to ana­lyst Ali Mar­tinez, whales imme­di­ate­ly took prof­its after Ethereum hit $2,300. 

The impact of sig­nif­i­cant hold­ers sell­ing could poten­tial­ly dri­ve down the price of ETH in the com­ing weeks. In a bear­ish sce­nario, the cryp­tocur­ren­cy might retest the $1,555 sup­port lev­el, and sus­tained sell­ing pres­sure could push ETH as low as $1,460 with­in the next two months, the ana­lyst predicts. 

Despite these con­cerns, the over­all mar­ket sen­ti­ment remains cau­tious­ly opti­mistic, leav­ing room for poten­tial fur­ther growth in the cryptocurrency’s price.

Although Ether’s mar­ket cap­i­tal­iza­tion of $282 bil­lion lags behind Bitcoin’s $857 bil­lion, both net­works gen­er­ate com­pa­ra­ble pro­to­col revenues. 

In the last sev­en days, the Bit­coin net­work accrued $61 mil­lion in fees, while Ethereum accu­mu­lat­ed $61.5 million. 

In addi­tion to insti­tu­tion­al inter­est, the price surge is fueled by expec­ta­tions of an ETF approval from the SEC. Despite the opti­mistic momen­tum, there are appre­hen­sions, that the upswing in sell­ing pres­sure might have reper­cus­sions on the ETH price in the com­ing days.

Ethereum’s surg­ing net­work fees 

The rise in Ethereum’s net­work fees is intri­cate­ly tied to the expan­sion of its DeFi ecosys­tem and the wide­spread adop­tion of non-fun­gi­ble tokens (NFTs). 

Increased defi and NFT activ­i­ties have dri­ven up net­work fees, with more indi­vid­u­als engag­ing in intri­cate trans­ac­tions, lead­ing to pro­longed peri­ods of ele­vat­ed fees. 

The cre­ation, trans­fer, and trad­ing of NFTs involve smart con­tract exe­cu­tions that con­sume gas, and the asso­ci­at­ed costs can fluc­tu­ate based on net­work con­ges­tion and gas prices. While Ethereum’s high gas fees pose chal­lenges for NFT cre­ators and col­lec­tors, emerg­ing solu­tions like Lay­er 2 scal­ing and gas opti­miza­tion pro­vide opti­mism for a more cost-effec­tive and acces­si­ble NFT ecosystem. 

The surge in DeFi and NFT activ­i­ty on the Ethereum net­work since 2020 has result­ed in exten­sive trans­ac­tion activ­i­ty, con­tribut­ing to the per­sis­tent­ly high gas fees. 

Cur­rent­ly, the aver­age gas fee for mint­ing an NFT on Ethereum is around $100, sub­ject to vari­a­tions based on net­work con­ges­tion, gas prices, and smart con­tract complexity.

At the time of writ­ing, Ethereum is trad­ing at $2,348.23, accord­ing to Data from CoinGecko. 

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