Leading cryptocurrency Ethereum (ETH) is under increased selling pressure as financial group Fidelity transferred more than $200 million of the cryptocurrency to Coinbase within 48 hours.
The large influx of money into this exchange raises concerns about the possibility of exacerbating the current downward pressure on Ethereum’s price.
Risk of Ethereum decline due to Fidelity moving ETH to Coinbase
In a series of transactions over the past 48 hours, the crypto division of asset management company Fidelity deposited $213 million in ETH into leading exchange Coinbase via Cumberland.
According to Arkham, the first two transactions transferring 20,000 ETH to Coinbase were completed on January 8. The final transaction on Thursday involved depositing 11,250 ETH, worth $36.51 million, to Coinbase.
These ETH transactions have led to a spike in the volume of inflows into the exchange. According to Glassnode, on January 9, a total of 550,930 ETH, worth more than $1 billion, was deposited into exchange addresses—marking the largest single-day inflow since December 20.
The growing accumulation of ETH in exchange wallets could intensify downward price pressure if market demand cannot absorb the increased supply. When inflows into the exchange increase, this signal often indicates increased selling pressure as users transfer assets for liquidation. If selling orders exceed demand, this trend can lead to price declines.
ETH Price Prediction: Low Demand Raises Concerns
ETH/USD’s one-day chart shows there is no demand in the crypto market to absorb the increased supply. The Relative Strength Index (RSI) is falling reflecting weakening buying pressure. At the time of writing, this momentum indicator is trending down at 42.73.
ETH’s RSI points to weakening momentum, with the asset near the oversold zone but not yet undervalued. If buying pressure continues to decrease, ETH price could drop below $3,249 and fall towards $3,027.
On the other hand, if inflow stops and demand increases, Ethereum price could rise to $3,758.