Ethereum (ETH) active deposits to centralized crypto exchanges surged to above 20,000 deposits, reaching an 18-month high. It has now risen to its highest point since November 2021.
The spike in Ethereum (ETH) transfers to CEXs may indicate greater short-term sell pressure, according to crypto analyst Ali, who tweeted the information to his 25,400 followers on Twitter.
#Ethereum | On-chain data shows a significant spike in active $ETH deposits to centralized #crypto exchanges, which may signal increased short-term sell pressure. pic.twitter.com/ha6GrDkyAJ
— Ali (@ali_charts) May 6, 2023
However, other analysts suggest that the reason for the rise in the number of active deposit addresses may be that traders are getting ready to sell their ETH holdings, possibly in an effort to cash out on the remarkable rally of the PEPE memecoin.
Traders begin taking profits from Pepe (PEPE) memecoin
On-chain analytics firm Santiment also supports the same speculation, stating that the raising number of ether deposits could be arising from traders taking profits on their Pepe positions.
“Exchange addresses interacting on the network is now at its highest level since November 2021,” Santiment said. “As expected, $ETH is showing decoupling signs and on the cusp of breaking $2k once again.”
🚀 Updating our report on #Ethereum's sky-high active deposits, exchange addresses interacting on the network is now at its highest level since November, 2021. As expected, $ETH is showing decoupling signs and on the cusp of breaking $2k once again. https://t.co/zYjY7669yj https://t.co/dQlKsTVyt2 pic.twitter.com/2nMXOUGgYC
— Santiment (@santimentfeed) May 5, 2023
Meanwhile, data indicates that active Ethereum deposits started to rise in early May, aligning with the start of meme coin season. Furthermore, trading tokens like PEPE for a more reliable asset like ETH is definitely a wise decision considering the unstable hype cycle that frequently characterizes the financial value of such tokens.
This trend is not surprising, as Ethereum (ETH) is one of the most widely used cryptocurrencies and has a strong track record of price appreciation. Also, many investors see it as a safer bet than meme coins due to its established use cases and development community.
Investing in meme coins such as Pepe (PEPE) is inherently risky. In fact, only days after reaching an all-time high on May 6, the price of the new memecoin has dropped by more than 42%, putting many investors in the red. As of the time of publication, it has dropped 11.73% just in the past 24 hours.
A recent report by the blockchain analytics platform Lookonchain shows that one crypto whale obtained 962.3 billion Pepe tokens on May 5 for an average price of $0.000003122 using 70 Wrapped Bitcoin (WBTC) and 470 Ether (ETH).
A whale bought 962.3B $PEPE($2.46M currently) with 70 $WBTC ($2.07M) and 470 $ETH ($937K) in the past 2 days, with an average buying price of $0.000003122.
He has lost ~$541K at the current price!https://t.co/GDBdXcVyGt pic.twitter.com/7s1Ns90OOc
— Lookonchain (@lookonchain) May 7, 2023
However, since then, PEPE has lost 42% of its value from its peak, according to Coinmarketcap. The PEPE holdings of the crypto investor are currently valued at only $2.4 million, representing an unrealized loss of more than $60,000.
Ethereum Foundation moved $30 million ETH to Kraken
While many believe that a spike in active deposit addresses was caused by PEPE traders seeking to take profits from their gains, some community members speculate that the actions probably came from the Ethereum foundation.
The Ethereum Foundation reportedly moved nearly $30 million in Ether (ETH) to the Kraken cryptocurrency exchange on May 6, exacerbating market anxiety about a possible selloff event. At its peak in 2021, the foundation sold 20,000 ETH. However, in 2020, 100,600 ETH were sold for $657.