$259.2 million in ETH moves to exchanges, prepare for dumpster fire?

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Ethereum is experiencing increased selling pressure. This trend is highlighted again by a big movement of ETH to exchanges, with over 108,000 ETH, priced at approximately $259.2 million, transferred within just 24 hours.

Selling pressure is always out there

This large influx of ETH to exchanges often suggests a potential drop in its price, because when supply increases while demand remains the same, it typically leads to lower prices.

Source: Ali/X

Now an individual who participated in an Ethereum ICO has been consistently selling their ETH holdings.

They sold 6,000 ETH worth about $14.11 million, bringing their total sales since September 22, 2024, to 40,000 ETH at an average price of $2,525.

Despite these sales, they still hold 99,500 ETH valued at around $238 million, meaning that more selling could be on the horizon.

eth
Source: Lookonchain

Ethereum’s underperformance

Ethereum has also been lagging behind other riskier assets like Bitcoin and the S&P 500.

While Bitcoin has seen a slight decrease of 0.32% and the S&P 500 has risen by 3.63%, ETH has dropped double digits, by 26% over the past three months.

Also, total fees on the Ethereum network have fallen by 43.9%, now standing at $247.6 million.

Source: IntoTheBlock

This decline in fees is contributing to Ethereum’s struggles, as on-chain activity on Ethereum’s Mainnet also decreased recently.

The Dencun upgrade is clearly affected Ethereum’s performance, and some says maybe not in a good way.

This update included EIP 4844 and reduced Layer 2 transaction costs by more than ten times, leading to a surge in L2 activity.

As a result, fees on ETH’s Mainnet have hit an all-time low, which has impacted the amount of ETH being burned and made the cryptocurrency inflationary again after previously following a deflationary trend.

The rise of Layer 2 solutions

The summer slowdown and sideways trading in traditional markets have driven on-chain fees to multi-year lows.

With lower fees and reduced ETH burning resembling a company facing declining revenues and stopping stock buybacks, it’s no surprise that ETH’s price is struggling.

On the other hand, Optimism, one of the leading Layer 2 networks on Ethereum, has seen its governance token outperform others.

In the third quarter, the OP/ETH pair grew by 28%, benefiting from increased on-chain activity on L2s and showing better performance than Ethereum itself.

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