OpenSea Trading Volume Could Cause Ethereum Price Crash, Expert Says


Ethereum’s latest price drop was fueled by an increased influx of altcoin to cryptocurrency exchanges. Experts attribute Ethereum’s price drop to direct transfers from the NFT marketplace OpenSea.

OpenSea transaction volume dangerous for Ethereum

According to Etherscan data, OpenSea has unloaded thousands of ETH into the market in recent weeks. Likewise, NFT creators on the platform have benefited, according to the statistics. The volume of NFT trading on OpenSea continues to rise in January.

Since the beginning of 2022, OpenSea, the largest NFT marketplace, has seen extraordinary NFT sales. According to dune analysis, monthly NFT sales on OpenSea currently exceed $4.5 billion. This amount surpasses their previous monthly sales record of $3.5 billion and is expected to rise further.

The volume of Ethereum exits has steadily increased over the past two weeks. 21,000 Ethereum were transferred directly from OpenSea’s wallet to Coinbase.

Related article | OpenSea Transaction Volume Shows NFTs Don’t Slow Down

As NFT sales increase, so do OpenSea’s royalties and direct transfers. The rapid rise of the NFT market could increase Ethereum’s influx to exchanges such as Coinbase.

As royalties from OpenSea, an additional 35,300 Ethereums were distributed among NFT publishers. Colin Wu, a Chinese journalist and crypto analyst, argues that the surge in Ethereum inflows from OpenSea to Coinbase has increased selling pressure.

Historically, a sharp rise in selling pressure causes the price of the altcoin to fall. Colin Wue tweeted:

“OpenSea and NFT issuers could be one of the pressure points for ETH to crash. Over the past two weeks, the amount of ETH transferred directly from OpenSea Wallet to Coinbase reached 21,000, and the amount of ETH transferred to royalty distributors reached 35,300. .”​

Analysts have noticed that net outflows for Ethereum in 2021 were relatively large. Ethereum’s net inflow has increased significantly in the past month.

ETH/USD plunges towards $2,200. Source: Trading Display

IAmCryptoWolf, a pseudonymous cryptocurrency analyst, assessed Ethereum’s price trend and predicted that a rise in the altcoin’s price around $2,300 would create a strong barrier.

Ethereum Net Position Change – All Exchanges. Source: Glassnode

However, OpenSea is not the only cause of ETH’s price drop. According to Coinmarketcap data, ether is down more than 35% so far. More than $746 has been subtracted from the value of ETH in the past 14 days as it has fallen below $3,000. ETH is currently trading at $2,407, down -3.71% in the past 24 hours.

Other factors that can cause price drop

Several reasons contributed to the crypto market crisis, including a wide-ranging sell-off in the market in response to a policy change by the US Federal Reserve Bank. Russia’s changing policy direction towards crypto is one of the factors to consider.

Market participants, on the other hand, remain optimistic about Ether over the long term. Several upgrades that the network plans to roll out this year are fueling these expectations. For starters, the next phase of Ethereum’s journey to become a proof-of-stake (PoS) blockchain is planned for this year. Several forecasts claim that the merger will take place in the first half of 2022. This improvement will increase the scalability of the Ethereum network and go a long way towards making Ether issuance deflationary.

As a result, it will encourage adoption and drive up the price of Ethereum in the long run.

Related article | TA: Ethereum Dives, Indicators Show Signs of Bigger Downtrend

Featured image from Shutterstock | Graphs by Glassnode, and Trading Display



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