Two previously inactive Ethereum wallets suddenly reactivated after six years, moving approximately 135,548 ETH, valued at nearly $400 million, to Bitfinex just hours before the cryptocurrency market faced severe turbulence. The wallets resumed activity on the same day, prompting questions about the possible strategy behind these significant transfers.
The wallets, untouched since January 2019, demonstrated astonishing returns, with on-chain data from Spot on Chain indicating the holdings were initially worth around $20.8 million. If sold at current prices, the owners of these wallets would realize remarkable gains—over 1,817% profit, which equates to more than $378 million. The first wallet, identified as 0xfdfe…06def3, transferred 77,736 ETH (around $193 million) just 11 hours prior to the market's downturn, followed by the second wallet, 0x693b…98dee8, which sent 57,813 ETH worth approximately $144.3 million just one hour later.
Critically, the timing of these transactions raised suspicions. Shortly after, the crypto market plummeted, with ETH falling to $2,250 and Bitcoin dipping below $92,000. This rapid decline resulted in over $2 billion worth of liquidations, predominantly impacting long traders, with approximately $1.58 billion liquidated within just 24 hours.
Many market analysts pointed to President Donald Trump's sudden tariff increases on Canadian, Mexican, and Chinese imports as catalysts for this sudden upheaval. On Saturday, Trump imposed significant tax hikes, including 25% on North American goods and 10% on Chinese imports. These moves sparked fear of deteriorated trade relations and potential trade wars, contributing to widespread panic selling.
Former Binance China researcher Jinze highlighted the broader implications, warning such tariffs could pose severe macroeconomic threats, potentially influencing both traditional and crypto markets. Looking at the data from CoinGecko, ETH had tumbled nearly 19.9% within 24 hours, marking 22.4% losses over the week, significantly lagging behind the broader crypto market, which was down approximately 10.6%.
Further complic**ared conditions, major altcoins began to hover at pivotal support levels. Market analysts noted they could either spark new rally potential or lead to increased capitulation. With the Federal Reserve proceeding with quantitative tightening amid Trump's tariff strategies, the overall outlook for the crypto market remained bearish.
Ethereum's recent price movement demonstrated substantial volatility, reflecting broader market uncertainties. Ethereum had slipped over 15% within 24 hours, testing the $2,117 support level before finding relative stability around the $2,600 mark at the time of reporting. The liquidations during the timeframe were among the highest recorded since Bitcoin's inception, surpassing infamous market downturns including the Covid-19 induced crash and the FTX selloff.
Signs indicated the crypto market was undergoing significant pressure from excessive leverage observed over previous months since the election of Trump, who is viewed as pro-crypto. The result was termed as 'sell-the-news,' leading to sustained sell-offs as uncertainty mounted. This temperamental market also showed correlations with traditional stock indices, signaling possible additional declines.
Trading patterns revealed concerning signs, particularly with increased ETH deposits on centralized exchanges by long-term holders, as key investors viewed the situation with wariness. Analysts noted Bitcoin and Ethereum experienced marked rises on centralized platforms, implying investor hesitation and overall market frailty.
Looking forward, crypto market specialists expect Ethereum's fortunes may be widely contingent on broader economic patterns and market behavior. Established analysts such as Ki Young Ju of CryptoQuant are cautiously optimistic about potential recovery spurred by sustained institutional interests and governmental acceptance of digital currencies.
On the other hand, Benjamin Cowen noted, the market faces bearish risks if Bitcoin continues slipping below the significant psychological threshold of $90,000. Conversely, if Bitcoin maintains above $108,000, this could herald the start of another bull market phase.
For Ethereum, the immediate future hinges on sustaining support levels—especially safeguard thresholds around $2,300, as hints of recovery could emerge should the price break above $2,600. Failing to keep below $2,250 could trigger additional declines, possibly revisiting lows of $2,120 or even $2,000.
Investor vigilance remains imperative, especially concerning the technical signals from both MACD and RSI, which presently suggest bearish trajectories. Therefore, monitoring Ethereum's navigation through these pivotal technical markers will be key for market players hoping to understand [its] current and future positions within this turbulent financial climate.