Ethereum’s price action has been closely tracking that of Bitcoin and the aggregated crypto markets, but its recent downtrend may not have been simply the result of weak price action, as data suggests that ICOs have been selling a significant amount of their ETH in recent times.

The treasury sale of ETH from ICOs could be a significant force that has been suppressing Ethereum’s price as of late, and these ICOs still hold a massive amount of the cryptocurrency – which could mean that the steady stream of selling pressure will continue for the foreseeable future.

Are ICOs the Source of Ethereum’s Recent Losses? 

At the time of writing, Ethereum is trading down just under 1% at its current price of $173.70, which marks a notable drop from its recent highs of over $220 that were set in mid-September.

While looking towards ETH’s year-to-date highs, it becomes even more clear as to just how bearish its recent price action has been, as it is currently trading down nearly 50% from its late-June highs of nearly $350.

In a recent research report published on Diar, data elucidates that Ethereum’s 77% drop from its early-2018 highs has coincided closely with major ICO projects selling a notable amount of the ETH that they raised from token sales during the ICO mania in 2017 and early-2018.

“Ethereum has dropped 77% in price from the start of last year when ICO treasuries saw massive activity with withdrawals being the highest they ever were this year,” Diar explained.

They further noted that last November and December were the largest periods of ETH sales from major ICOs, which coincided closely with the bottom of the market.

Will ICOs Continue Putting Pressure on ETH?

It is important to note that although ICOs have already sold off a significant amount of their ETH holdings, data shows that they still hold nearly half of the Ethereum that was raised from their token sales, with their January of 2018 wallet balance sitting at over 4.6 million ETH, while their current wallet balance sits at over 2.2 million ETH.

Assuming that the markets continue to express increased volatility, it is highly probable that projects will continue to sell off their Ethereum treasuries to attempt to preserve their capital, which could perpetuate any downtrend experienced by the cryptocurrency in the near-to-mid term.

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