Ethereum Foundation’s $56.1M Kraken Deposit Sparks Speculation Amid Price Drop

• Ethereum’s price shows potential for recovery despite recent dips, supported by key levels at $3,542.77 and $2,881.92.
• Maintaining $3,550 daily support is crucial to avoid further declines in Ethereum’s price amid market volatility.
• High trading volumes near support and resistance levels could confirm strong trader conviction and influence ETH’s direction.

Ethereum (ETH) has been experiencing notable price movements recently. As per Lookonchain, an onchain analytic firm, an Ethereum Foundation-related wallet recently deposited 15,254 ETH, valued at approximately $56.1 million, into Kraken. 

This move coincides with a period of price decline for Ethereum (ETH), raising questions about future price movements and market strategies. The ETH in this wallet is linked to an Ethereum Foundation wallet and another wallet that acquired 200,000 ETH during the Ethereum ICO.

Despite the recent dip in ETH prices, the trend suggests a continued upward momentum. Such fluctuations, known as “leveraged flushouts,” are normal in volatile markets. As highlighted by VeLLa Crypto, an analyst, maintaining the support level above $3,550 on a daily basis is crucial to avoid further declines. 

Key resistance is identified at $3,884.85, a level tested multiple times, acting as a barrier against further price increases. The strong selling pressure at this resistance level has prevented ETH from surpassing it. 

On the support side, the immediate level to watch is $3,542.77. This horizontal support has cushioned recent price drops, preventing more severe declines. Additionally, the $2,881.92 level is another significant support, historically providing stability during downturns.

The price action pattern suggests a possible break below the current minor ascending trendline support. If this occurs, ETH might test the horizontal support at $3,542.77. A rebound from this support could lead to a bullish move, potentially retesting the $3,884.85 resistance.

The projected price action, indicated by a purple line on the chart, forecasts a dip to around $3,542.77 before a potential recovery.

Volume analysis, though not shown on the chart, is essential for confirming the strength of these support and resistance levels. Higher trading volumes near these levels could indicate stronger trader conviction. 

Momentum indicators like the Relative Strength Index (RSI) and the Moving Average Convergence Divergence (MACD) can provide additional insights into the trend’s strength and potential reversals. Currently, Ethereum’s price stands at $3,699.43, with a 24-hour trading volume of $17,991,657,160. ETH has seen a 3.14% decline over the last 24 hours.