Why is Ethereum Price Dropping? Whale Activity and ETF Delays Explained

Ether (ETH), the second-largest cryptocurrency by market capitalization, has fallen below the $3,000 mark in recent trading, mirroring Bitcoin’s decline and erasing gains from the weekend. This drop comes amid large holders selling off their ETH, even as anticipation builds for the potential approval of a spot Ethereum exchange-traded fund (ETF) in the United States.

As per CoinMarketCap data, ETH dropped more than 4%, reaching a daily low of $2,822. However, at the time of writing, the cryptocurrency is trading at $2,914. The trading volume of ETH rose 27.25%, standing at $13.9 billion. Meanwhile, the market cap of the cryptocurrency stands at $350 billion.

Ether had reclaimed the $3,000 price level over the weekend, reaching a high of $3,081. However, the cryptocurrency failed to maintain this level after major holders sold their coins. Crypto journalist Colin Wu highlighted on platform X that Golem was one of the entities that sold a significant amount of ETH.

Golem, a project that raised 820,000 ETH in ICO in 2016, has transferred 36,000 ETH to Binance, Coinbase, Bitfinex, etc. in the past 37 days, worth about $115 million. Currently, Golem still has 231,400 ETH, worth about $656 million. https://t.co/EjLTyeEAmz

— Wu Blockchain (@WuBlockchain) July 8, 2024

According to Wu, Golem raised 820,000 ETH during its initial coin offering (ICO) in 2016. The project transferred approximately 36,000 ETH, worth $115 million, to Binance, Coinbase, Bitfinex, and other exchanges over the past 37 days. The transfer of funds implies that the decentralized platform sold some of its ETH holdings. However, Golem still holds 231,400 ETH, worth about $656 million.

Additionally, LookonChain noted that two traders capitalized on the weekend price gain and sold around $41 million in Ether. An X post revealed that “smartestmoney.eth” deposited 6,440 ETH worth $19.5 million to Binance, incurring a loss of $2.65 million (-7.74%) on this trade but still maintaining a cumulative profit of $20.6 million.

Furthermore, an inactive whale “0x742” deposited 7,240 ETH, worth $21.4 million, to Kraken after holding onto these tokens for 1.5 years. The whale’s estimated profit stands at $12.83 million, a 149% gain.

These large holders have been taking profits amidst the potential approval of a spot Ether ETF in the U.S. The Securities and Exchange Commission approved 19b-4 filings earlier this year from leading asset management firms like BlackRock and VanEck.While the SEC has not yet approved the S-1 filings required for the launch of a spot Ether ETF, the regulatory body and issuers are actively discussing the products, with some experts predicting a potential launch by July 15. This comes after an earlier prediction of a July 4 launch date proved premature.

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