- Galaxy Digital’s $100M ETH exchange transfers raise market concerns as whale activity hints at potential selling pressure on Ethereum.
- Ethereum network usage plunges with gas fees at a 5-year low, signaling weak on-chain engagement and reduced ETH burning activity.
- Despite real-world adoption in places like Panama City, Ethereum faces bearish outlook due to low demand and rising net ETH issuance.
Galaxy Digital has stirred the Ethereum market by transferring over 62,000 ETH—worth nearly $100 million—to exchanges in just six days. The firm deposited another 12,500 ETH ($20 million) to Binance eight hours ago from the time lookonchain reported. These large deposits suggest that Galaxy may be preparing for a sale. Historically, such whale activity signals a shift in market sentiment. Ethereum’s price currently sits near $1,583, but concerns are mounting over further downside risk.
Galaxy Digital has not explained the motive behind these continuous transfers. Consequently, analysts have split views. Some believe the firm plans to offload its ETH holdings. Others think it could be rebalancing its portfolio. Additionally, Galaxy manages over $10 billion in assets. Its strategy typically leans toward long-term positioning rather than sudden asset exits. However, consistent deposits to exchanges raise caution among market participants.
Ethereum Network Usage Hits a Low Point
Besides whale activity, Ethereum faces another challenge—its network fees are now at a five-year low. As of April 11, the average transaction fee fell below $0.17. This is the lowest since May 2020. Ethereum’s network activity has slowed since mid-January. During that time, fees hovered above $5. Since then, they have declined steadily, with only minor spikes caused by brief user activity surges.
From February to early March, average transaction fees trended downward. Ethereum’s price mirrored this drop, moving lower alongside the reduced activity. By late March, average fees fell to around $0.20. The current low fee environment suggests weak demand and low on-chain engagement. Hence, fewer transactions are burning ETH, leading to a higher net issuance.
Bearish Implications for Ethereum’s Price Action
Lower gas fees might appear bullish for users, but they reflect bearish fundamentals. Network usage drives demand and reduces supply via ETH burning. With fewer burns and rising issuance, supply may outpace demand. Consequently, Ethereum could face ongoing price stagnation or further decline. Analysts now anticipate a potential correction if activity doesn’t rebound soon. Moreover, while cities like Panama City embrace ETH for payments, broader on-chain data tells a different story. Ethereum must reignite demand and network usage. Otherwise, prices could remain under pressure despite growing real-world adoption.
