Ethereum co-founder Vitalik Buterin's $10M Ether sale and its impact on the bullish Ethereum market

Ethereum co-founder Vitalik Buterin, was just called out by the a crypto community member for dumping over $2 million worth of Ether after making a bullish tweet. Onchain analytics firm Lookonchain also took on X to claim that Buterin made another transfer to the same account on 9 August. This sudden sale of Ethereum by the co-founder has a lot of speculating if this could mean an impending market correction. So what is really happening here?

Buterin denies speculations

Buterin was quick to clarify and deny all allegations, stating that he had never sold any ETH for profit; the transfer he used to financially support various web3 projects and charities.

Buterin claims that:

"I haven't sold and kept the proceeds since 2018. All sales have been to support various projects that I think are valuable, either within the Ethereum ecosystem or broader charity (eg. Biomedical R&D)."

The transfer led to speculation that Buterin has been selling his Ether holdings to realize Ether profits, especially as the cryptocurrency is trading 180% higher compared to its cycle low of $885 in 2022.

Amidst all this criticism, there were also fans who came forward to show their support for Buterin, saying that there was nothing wrong with the Ethereum co-founder taking some profits by reducing his ETH holdings.

What are the impact of this sale on the Ethereum market

Such a large Ether movement, especially from such a notable person from the industry, can lead people to have the illusion of an impending selling pressure, causing a short term market reaction.

For example, in November 2021, when the Ethereum Foundation transferred 20,000 ETH to Kraken, this transfer occurred just before the Ether price peaked, followed by an 85% correction in its price.

This showed that the sale of the Ethereum - whether it was coincidental or a deliberate effort - contributed to the ETH market decline.

But this doesn't mean that all Ethereum Foundation sales will lead to major market corrections. Interestingly, this time the sales occurred at a time when the Fed is planning to cut interest rates and outflows from spot Ethereum exchange traded funds are slowing down.

From a technical perspective, Ether is currently trading within a range set by its 50-week (red) and 200-week (blue) exponential moving averages (EMA).

The recent decline from the 50-week EMA suggests a higher likelihood of the price dropping to the 200-week EMA—around $2,000 by October, which would represent a decrease of about 15% from current levels.

The 200-week EMA also aligns with the lower trendline of Ether’s multi-year ascending triangle pattern. This confluence of support increases the chances of a strong rebound, potentially pushing Ether to retest the triangle’s upper trendline—near $4,000—by the end of 2024 or early 2025.