Ethereum is trading around $1,560 following the sharp market decline. While the decline in price fell below the levels previously viewed as support, the movement in a large wallet reportedly linked to Joseph Lubin, one of the co-founders of Ethereum, also attracted attention in the market.
The transfer came after more than three years of silence
According to on-chain data, a wallet associated with Lubin transferred approximately 80,000 ETH after more than three years of inactivity. The value of these assets at the time of the transaction was calculated between $121.6 million and $123.5 million. It was reported that the wallet in question previously contained approximately 243,300 ETH, which corresponds to approximately 370 million dollars.
While the data did not confirm that the transferred ETH was sent to exchanges, it did indicate that the assets may have been used as collateral on the MakerDAO side.
It was stated that the transferred ETH was moved to two separate wallets and then deposited to MakerDAO. In the current position, it was seen that there was approximately $ 209.26 million in DAI debt against ETH collateral. This table suggests that the transaction may be an arrangement aimed at collateral management and reducing liquidation risk rather than a direct sale.
Mini dictionary: MakerDAO is a DeFi protocol that allows users to produce a decentralized stablecoin called DAI by collateralizing crypto assets. DAI aims to maintain value close to the US dollar, and the liquidation mechanism can be activated when the collateral rate falls below certain thresholds.
Why is the market watching this transaction closely?
The size and timing of the transfer stood out because it coincided with a period of severe sales pressure. During periods of increased volatility in crypto assets, large wallet movements are often interpreted as the possibility of new sales. However, it has not yet been confirmed that the transferred ETH has made it to central exchanges.
Large investors can move ETH for different reasons, such as changing the custody order, security measures, staking preparation, re-establishing the collateral structure or adjusting the debt position. In this case, the fact that a loan was taken in return for the deposited ETH indicates that the transaction is mostly a collateral strategy carried out within decentralized finance.
ETF outflows and technical levels stand out
The weakness in Ethereum coincided with a decline in institutional demand. US spot Ethereum ETFs recorded net outflows of $5.97 million on June 5. In the same session, a larger outflow of $326 million was seen in Bitcoin ETFs. Money coming out of regulated investment products can put pressure on market sentiment.
On the technical side, Ethereum broke below the $1,873 and $1,693 levels that previously served as support. Thus, the price entered the main demand zone between $1,540 and $1,590. If buyers defend this area, a short-term reaction rise towards $1,693 may occur. In a stronger recovery, the range between $1,750 and $1,790 is watched as a resistance zone.
Which levels are followed for downside risk?
The overall picture remains weak as long as ETH remains below $1,873. In order for the short-term momentum to recover, first $ 1,790 and then $ 1,873 must be overcome again. Otherwise, the effect of the recent decline may continue to be felt in the market.
If the $1,540 to $1,590 zone cannot be maintained, the next support area is between $1,407 and $1,439. A daily close below $1,540 could increase the risk of the downside deepening. Analyst Ali Charts also stated that a weekly close below $1,850 could accelerate the decline. According to the analyst, $ 1,560 stands out as the intermediate target and $ 1,070 stands out as the lower limit of the multi-year band.
