By
Temitope Olatunji
April 26th, 2024
A closer examination of past instances reveals a pattern: whenever FTX and Alameda Research executed similar large-volume transfers of Ether tokens, Ethereum price experienced a notable correction.
In a cryptic twist of fate, the latest maneuvers by bankrupt crypto exchange platform FTX and Alameda Research have emerged as pivotal points of interest in the cryptocurrency landscape, especially concerning Ethereum’s price trajectory.
These influential entities made a splash by relocating a significant sum of Ether tokens to the centralized exchange Coinbase. With this transfer surpassing $24 million, speculations abound regarding its potential role in the subsequent dip in Ethereum’s value.
According to data shared by intelligence platform Spot On Chain, the wallets associated with FTX and Alameda Research triggered a significant transfer, sending 6,500 Ether tokens to the centralized exchange Coinbase. This substantial movement of funds, worth millions of dollars, immediately caught the attention of market observers.
Notably, it wasn’t the first time that these entities had orchestrated such sizable transfers, prompting analysts to scrutinize their potential impact on Ethereum price dynamics.
Historical Context: ETH Price Corrections
A closer examination of past instances reveals a pattern: whenever FTX and Alameda Research executed similar large-volume transfers of Ether tokens, Ethereum price experienced a notable correction.
Five out of seven such occurrences have led to a downturn in ETH value, highlighting the influence of these entities on the market sentiment surrounding Ethereum. As such, the recent transaction has reignited concerns about the potential for another downward movement in Ethereum’s price trajectory.
In the span of the last fifteen days, FTX and Alameda Research deposited a cumulative 6,500 Ether tokens onto Coinbase, amounting to a substantial $24.57 million at an average price of $3,780 per token, as shown by Spot on Chain on the chart below.
This move assumes significance against the backdrop of Ethereum’s ongoing consolidation below the $3,800 level. The timing and magnitude of the transaction have led market participants to speculate on its potential implications for Ethereum’s immediate price direction.
BTC Correlation and Price Implications
Furthermore, Ethereum’s price movements have historically exhibited a tight correlation with Bitcoin, the largest cryptocurrency by market capitalization.
With a correlation coefficient of 0.98 between the two assets, any significant developments in Bitcoin’s price often reverberate across the Ethereum market as well. Considering Bitcoin’s recent correction alongside FTX and Alameda Research’s Ether deposit, there is a heightened risk of Ethereum experiencing a further decline in price.
Current State of Ethereum
As of the time of writing, Ethereum’s price stands at $3,704, reflecting a notable decline from its recent peak and year-to-date high of $4,093.92.
The market sentiment surrounding Ethereum remains uncertain, with investors closely monitoring the potential impact of external factors such as large-scale transactions and Bitcoin’s price movements on Ethereum’s price trajectory.
The recent transactions by FTX and Alameda Research have sparked discussions about their potential role in Ethereum’s price dynamics. With historical precedents suggesting a correlation between such transactions and Ethereum price corrections, market participants remain cautious about the short-term outlook for Ethereum.