Ethereum (ETH), the second largest cryptocurrency by market capitalization, is experiencing new downward pressure amid widespread market conflicts. It hit a mid-December high of 4,107, then fell below the all-time high of $4,868 in November 2021, then below $1,800, a 53% drop from its December peak. However, traders are rushing to assess the depth of this current recession, but new on-chain developments have temporarily stole the spotlight.
Is it really the Ethereum Foundation?
A transaction flagged this week by the on-chain analytics service LookonChain raised an alarm, suggesting suspected liquidation risk of the Ethereum Foundation (EF). LookonChain has been reported via X. “The suspected Ethereum Foundation wallet deposited 30,098 ETH (56.08m) with the manufacturer and reduced the liquidation price five hours ago. The wallet currently has 100,394 ETH ($100 million) from the manufacturer, with a liquidation price of $1,127.06.”
The size of the transaction, which is reported to be worth $56.08 million in ETH deposits, has received widespread speculation about the potential exposure of EF. LookonChain data implies that 30,098 ETH (approximately $182 million) is being used to support Makerdao Vault with a liquidation threshold of about $1,127.
China’s Crypto News Outlet WU Blockchain was one of the first to distribute stories. However, shortly afterwards, the WU blockchain provided clarification based on an analytics of Arkham Intelligence.
Updated analysis shows that wallet connections to the Ethereum Foundation may be exaggerated. This address appears to belong to an early ETH investor who once interacted with EF’s official wallets but has since managed funds independently. The 30,098 ETH sediment was a strategic move to raise collateral and lower the liquidation price of Makerdao Vault, perhaps during the market slump.
The WU blockchain is gaining attention through X. “Modification: 0x22…1246 was flagged by Arkam as a suspected address for the Ethereum Foundation, but on-chain data confirms that this is not the case. This address received a 4M DAI transfer from the Ethereum Foundation ETH Sale in May 2022, but its trading behavior and initial ETH funding returns to Jonny.eth (0xB76) indicating that it is likely to be an early ETH investor rather than the foundation itself. This address deposited 30,098 ETH in the Makerdao Vault today.
The liquidation price remains at $1,127, but at a level that some observers believe they can test if market pressure continues, but there is currently no official evidence linking the Vault to the Ethereum Foundation. As a result, the rumors of EF liquidation seem unfounded given the explanations brought about by the Wu blockchain based on Arkham data.
At the time of pressing, ETH was traded for $1,925.
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