On May 6, Ethereum Foundation transferred nearly $30 million in Ether (ETH) to the Kraken cryptocurrency exchange, causing jitters in the market about a potential selloff event.
ETH price fell 4.8% to $1,900 on the day, but the decline has been negligible so far amid a wider recovery trend.
ETH price holding key support
Ether’s price recovered modestly to $1,920 on May 7 after testing its 50-day exponential moving average (50-day EMA; the red wave) near $1,850 as support a day ago.
Moreover, the price volatility dropped on Kraken in the said period, per the contracting Bollinger Bands Width in the chart below. That further shows traders’ calm amid the Ethereum Foundation transfer.
Notably, the 50-day EMA has capped Ether’s downside attempts so far in 2023, barring the early March selloff that saw the price briefly falling below the red wave. Meanwhile, testing it as support has prompted the ETH price to pursue a breakout above $2,000.
As a result of this support, ETH bulls may attempt to take the price above $2,000 again.
Conversely, a drop below the 50-day EMA could have traders eye a support confluence comprising a multi-month ascending trendline and the 200-day EMA (the blue wave) near $1,700 as the next downside target, down about 13% from current price levels.
Even with a larger decline, ETH would be maintaining its overall recovery trend when measured from its June 2022 bottom of $880.
Ethereum exchange reserves vs. Kraken reserves
A rising exchange balance suggests potential selling pressure rising and vice versa. In Ethereum’s case, the balance remained lower across all the exchanges despite the Ethereum Foundation’s transferring $30 million in to Kraken.
For instance, Kraken’s Ether balance increased to 1.84 million ETH on May 6 from 1.83 million a day ago.
Nevertheless, the balance across all exchanges actually dropped to 18.15 million ETH from 18.22 million ETH on the day, indicating that any…
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