Ethereum [ETH] could be on the verge of a recovery following its recent rally, but a significant sell-off by Fidelity has raised some concerns about the possibility. Reports indicate that Fidelity transferred a substantial amount of ETH to Coinbase, totaling 64,997 ETH worth over $213 million. This transfer occurred on Friday, amidst a bearish week for the cryptocurrency.
The transfer of ETH from a private wallet to an exchange suggests that Fidelity is selling off its holdings. This move coincided with a day when Ethereum ETFs saw a total of $159.4 million in net outflows, with Fidelity’s FETH ETF leading the pack with outflows of $147.7 million.
The sell-off by Fidelity has added to the sell pressure on ETH, which has been experiencing a downward trend since Tuesday. This led to a 15.54% dip from its weekly high to a weekly low. However, there seems to be a short-term bullish relief playing out, with ETH currently trading at $3,308, up 2.89% in the last 16 hours.
Despite the recent sell-off, there are signs of potential recovery for ETH. On-chain data shows that whales have been buying the dip, with large holder inflows exceeding outflows on January 9. Additionally, exchange flows have dipped to levels not seen since early November, indicating a possible resurgence in demand.
While the surge in whale demand and exchange flows suggest a potential weekend recovery for ETH, investors should remain cautious as the cryptocurrency faces a major support level at $3,033. Failure to attract enough demand at its current level could lead to a further decline towards this support level.
In conclusion, Fidelity’s ETH sell-off has added to the sell pressure on Ethereum, but there are signs of a short-term bullish relief. Investors should closely monitor the market dynamics and be prepared for potential downside risks.