Compass Investments

– Alameda moves $3.56 million into Ethereum – Are the markets ready for another crash?

The altcoin market may be facing another price crash.

Alameda Research, the now-defunct trading firm that was linked to the FTX crash, is active again for the second time in less than a month. The firm recently hinted at a potential sale of its Ethereum [ETH] and Solana [SOL] holdings. Historically, its actions have preceded large sell-offs of related assets, but will the scenario repeat itself now?

According to Arkham data, Alameda has acquired over 1,695 ETH worth over $3.56 million. This move seems to follow a familiar pattern. For instance, three weeks ago, they sold over $17 million worth of SOL tokens.

The company still has about $300 million in SOL, $35 million in bitcoins, and $20 million in USDT on its balance sheets. Thus, the liquidation of the company may trigger a selling pressure on both ETH and SOL.

In addition to Alameda Research’s actions, other entities are also reducing their positions in the largest altcoin. For example, a trader affiliated with Fasanara Capital sold $45 million worth of ETH. In addition, selling pressure is intensifying amid the closing of long positions, especially in capitalized altcoins.

What is the current price position of ETH and SOL?

Ethereum price is currently showing stability. On the four-hour chart, the altcoin is fluctuating around the resistance level, which has been holding the quotes since February.

MACD signaled a bullish trend at the time of preparation of the material, but the volume of large transactions was decreasing. The volume of significant transactions tripled from $17.5 billion to $5.67 billion.

This indicates weakening buyer demand in the price zone, which previously led to bearish reversals.

However, a break above this zone would invalidate the signals provided by Alameda Research, at least in the near term.

the meantime, the Solana price is trading in a sideways corridor, having lost a significant portion of its synchronization with ETH. The correlation coefficient dropped from 1 to 0.59.

Altcoin may drop to support at $76 after trading near the lower end of the range. This is also due to the decline in online activity, with the number of active addresses dropping from 7 million to 4.69 million in just two months.

The above indicators hint that if the precedent repeats itself, Ethereum and Solana may experience a short-term decline. However, if SOL holds its support and ETH breaks the $2,100 barrier, it could offset the expected decline in value.

Alameda Research and Fasanara Capital are apparently betting on a short-term decline in Ethereum and Solana quotes.