Ethereum is under new sell pressure after a high-profile crypto trader sold his ETH assets to buy decentralized finance (DeFi) tokens. This action is happening at a time when ETH is trading flat around the psychological $3,000 price level.
Why Is Hayes Moving Capital into DeFi?
Arthur Hayes, co-founder of BitMEX, affirmed that he is selling his Ethereum will buy high quality DeFi assets. Hayes said that the liquidity enhancement from fiats would be of advantage advantage to DeFi tokens rather than large-cap layer-one assets.
Hayes envisioned DeFi tokens as the next possible outperformer in case risk appetite remains high. In contrast, institutional Ethereum exposure is currently developing quickly as demonstrated by the recent BlackRock staked Ethereum ETF filing.
According to on-chain analytics, Hayes sent an approximately $2 million worth of ETH to crypto exchanges. Previous ETH transfers by Hayes to institutional counterparties were also identified flagged by blockchain trackers. This shows active movement of funds and not a change in custody.
The price movement for Ethereum is also a reflection of this increased uncertainty. ETH has been unable to regain its momentum, having been rejected at important resistance levels on several occasions.
Is DeFi Gaining Ground Over Ethereum?
According to Market analyst Ted Pillows, the $3,000 zone has turned out to be a zone of consolidation. Further upward movement may bring ETH price towards the $3,200 area. But if it does not hold the support, it may lead to a retest of the low demand areas around $2,700 to $2,800.
Institutional flows also constitute an almost immediate pressure on Ethereum price. During the week ending December 15, Spot Ethereum ETFs recorded massive outflows.
