Ethereum Plummets, Selling Pressure Mounts After Whale Dumps Massive Amount Of ETH

The price of Ethereum, the second-largest crypto asset in the world in terms of market capitalization, witnessed a slight drop Monday, which an on-chain researcher warned could trigger selling pressure.

Ethereum traded at $1,158.77 early Monday morning, showing a 1.59% drop from its $1,177.54 price late Sunday. But Ethereum was not the only one experiencing the dip as Bitcoin, the world's largest cryptocurrency by market capitalization, along with global stocks, saw their prices slightly plummet, perhaps due to investors worried about the ongoing COVID lockdown in China.

But the price drop could also be credited to the massive dump by an Ethereum whale Monday. On-chain data revealed that a whale moved 73,224 ETH, or around $85.7 million, to the centralized crypto exchange platform Binance. Following the massive ETH dump, on-chain researcher Lookonchain warned investors of potential selling pressure.

In cryptocurrency, selling pressure occurs when most of the traders sell their assets, suggesting that the majority of the investors think the asset's price will decrease.

Aside from that, Nansen data showed that Jump Crypto, a division of the Jump Trading Group, a global leader in web3 infrastructure development and investment, deposited over 2,500 ETH into different centralized cryptocurrency exchange platforms Monday. The transfer was collectively worth around $3.5 million, triggering industry watchers to speculate that whales are dumping assets.

There is a misconception among investors each time tokens are sent to centralized exchanges. Many investors immediately jump to the conclusion that the reason why investors send their tokens to CEX is that they want to sell them. However, there are times when some move their assets into exchanges because they have promotions and better staking offers.

This is the longest winter the cryptocurrency market has experienced since it was introduced. This year seemed like a series of unfortunate events in the industry. Aside from huge hacks launched by cyber criminals, top crypto businesses like Terra and FTX collapsed.

Ethereum has slowly picked up its price and eased up selling pressure. As of 2:36 a.m. ET Tuesday, the world's second-largest crypto asset was trading up 2.97% at $1,205.20 with a 24-hour volume of $7,215,897,669, according to the latest data from CoinMarketCap.