Massive amount of Ethereum has been sold on market, which could be main reason behind drop
Ethereum’s price performance in December was sad, to say the least. Poor fundamentals, a depressing macro situation on the market and a lack of network activity were the primary reasons behind the lack of momentum on the market. However, the real reason might be far more prosaic after we take a look at whale wallets.
According to the on-chain data, Ethereum whales who held up to 100,000 ETH have sold or moved up to 880,000 Ethereum since the beginning of this month. At least part of that sum has most likely been sold on the market, corresponding to the selling pressure we witnessed on the market throughout the month.
Even though the trading volume on Ethereum has not been exceptional in December, with the poor liquidity on the market, even a selling pressure of 500,000 ETH would be enough to push the price of the second biggest cryptocurrency on the market below the $1,200 price level.
Another large contribution to the active redistribution of assets was part of the global trend of funds migration from centralized cryptocurrency exchange to self-custody. Even though migration from exchanges to wallets is not associated directly with the selling activities, it could be a correlating factor, as some investors prefer liquidating their holdings rather than simply moving them to their own wallets.
As we mentioned above, the fundamental reason behind the plunging price of ETH could be tied to the decreasing network activity as more investors are leaving the industry for good, or at least until the market recovers.
At press time, Ethereum is trading at $1,199, deliberately trying to hold the $1,200 price threshold, which acts as a platform for any move toward the next resistance.