Why Ethereum’s rise to $3K was short-lived

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  • Ethereum’s price faced uncer­tain­ty as a dor­mant ICO par­tic­i­pant began to move holdings.
  • NFT trades occur­ring on the net­work declined.

On the 20th of Feb­ru­ary, fol­low­ing Ethereum’s [ETH] price sur­pass­ing $3,000, an ICO par­tic­i­pant, who was dor­mant for 8.6 years, deposit­ed 1,732 ETH, which amount­ed to $5.15 mil­lion on Krak­en at press time.

The par­tic­i­pant received 3,465 ETH, around $10.3 mil­lion at Ethereum’s Gen­e­sis, with the ICO price at approx­i­mate­ly $0.31.

Source: X

This sud­den move­ment could poten­tial­ly impact the price dynam­ics of Ethereum neg­a­tive­ly. It might intro­duce addi­tion­al liq­uid­i­ty into the mar­ket, poten­tial­ly influ­enc­ing mar­ket sentiment.

On the pos­i­tive side, the participant’s return and deposit could be inter­pret­ed as a sign of con­fi­dence in Ethereum’s cur­rent price levels.

It might attract the atten­tion of oth­er investors who per­ceive the mar­ket as favorable.

How­ev­er, there could be con­cerns about poten­tial sell-offs or prof­it-tak­ing strate­gies by long-term hold­ers, espe­cial­ly if the par­tic­i­pant decides to liq­ui­date a por­tion of the deposit­ed ETH.

This could also con­tribute to short-term sell­ing pres­sure, impact­ing the price temporarily.

How is ETH doing?

At press time, ETH had slipped below the $3,000 mark, with its price trad­ing at $2,936.98. In the last 24 hours, the king of alt­coins’ price had declined by 0.26%.

Despite the recent cor­rec­tion, the total num­ber of address­es hold­ing ETH had grown. This sug­gest­ed that the over­all inter­est in ETH was on the rise.

How­ev­er, this ris­ing num­ber did not seem to par­tic­u­lar­ly help ETH’s case.

Source: San­ti­ment

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The num­ber of NFT trades occur­ring on the Ethereum net­work had also declined sig­nif­i­cant­ly at the time of the report. This could change over­all sen­ti­ment negatively.

The drop in NFT trades may have been brought on by address­es opt­ing for alter­na­tive net­works with low­er gas fees, which remains a sore point for the net­work till date.

Source: San­ti­ment

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