Was Bankless Founder Right to Sell His Ethereum? On-Chain Data Reveals
Bankless co-founder David Hoffman bought his Ethereum (ETH) holdings. He argues the “ETH is cash” thesis has absolutely performed out. On-chain knowledge and the every day chart recommend the market is already pricing in his name.
Ether trades round $1,975, down 2.4% on the day and roughly 14% over the previous month. Active addresses are falling, and change balances are rising once more. Both echo the fade Hoffman described in his exit notice.
Why David Hoffman Sold His ETH
Hoffman called the “ETH is money” thesis a long shot. He argued it required each Ethereum layer to outperform rivals. According to him, that bar was missed.
The Bankless co-founder stresses he stays bullish on the Ethereum community. However, he sees no structural rerating forward for ETH as an asset. The protocol returns worth to L2s and apps moderately than capturing it.
His sale drew broad protection throughout crypto. Hoffman has been one of many loudest Ethereum advocates of the previous 5 years. The response break up the market. Some merchants agree the thesis has run its course. Others nonetheless see ETH as a reduced wager on Web3.
Declining Active Addresses Confirm Fading Network Demand
Daily lively addresses on Ethereum have trended decrease since early February, in accordance to Santiment knowledge. The metric peaked above 1.5 million in January. It now sits close to 544,000.
This fade tracks the broader drawdown from above $3,400 in early December to beneath $2,000 at the moment. Hoffman argues that L1 belongings are finally priced on charges and income. Fees solely circulate when customers maintain transacting on the bottom layer.
In his exit note, Hoffman pointed to Solana’s 2024 rerating and NEAR’s 2026 transfer. Both confirmed that L1 token power correlates with charge market share. Ethereum misplaced that share by 2024 and 2025.
He additionally referenced BNB and TRX, two of the highest-grossing chains. Their charts behave as he anticipated ETH would after 2022. The takeaway is that charge dominance, not know-how, units the ceiling.
A reversal within the pattern would weaken the sign. Addresses would wish to push again above a million on a 30-day rolling common. Until then, the on-chain backdrop matches Hoffman’s bearish call.
Demand is fading whereas exercise migrates to L2s. Those L2s pay virtually nothing again to the Ethereum base layer.
Exchange Supply Reverses, Sellers Return After Months of Accumulation
The second on-chain sign cuts a extra fascinating form. ETH provide on exchanges dropped sharply in late January, from roughly 8.5 million to about 7 million. That low held by April. The stretch seemed like a quiet accumulation.
However, the pattern has flipped in May. Supply on exchanges has climbed again to 7.5 million. It now holds regular at that stage. Coins transferring again to exchanges usually sign that holders are positioning to promote.
The rotation is small in absolute phrases however directionally essential. It coincides with the breakdown under $2,140 on the every day chart. It additionally overlaps with the renewed downtrend in active addresses.
Hoffman argues that bullish on-chain phases for ETH finally fade. The community is architecturally a “giver, not a taker.” The May reversal in change provide is according to that view.
Holders who accrued by the dip at the moment are distributing into weak point. They should not ready for a structural rerating.
The habits additionally traces up with the stablecoin level in Hoffman’s piece. Ethereum settles $163 billion in stablecoins at the moment, up from $3 billion in 2020. That utility helps the greenback greater than it helps ETH. Holders seem to be studying the identical memo.
Net change inflows have a tendency to lead to worth weak point by a number of weeks. If the May pattern continues into June, ETH might even see recent promoting stress even earlier than the every day chart breaks. The Q1 accumulation case not carries the identical weight.
ETH Price Prediction Points to $1,920 Channel Floor
The every day chart reveals ETH trapped inside a descending parallel channel since late April. Price was rejected from the 0.382 Fibonacci retracement at $2,382 in early May. It then misplaced the 0.236 stage at $2,140 in mid-May.
ETH at the moment trades at $1,978 and is grinding towards the decrease channel band. That zone aligns with the following seen help close to $1,920. A clear break under opens the trail towards $1,750, the earlier swing low and the 0 Fibonacci anchor.
Volume has been declining since early February. The drop indicators weak conviction from each patrons and sellers. Meanwhile, the 14-day RSI sits close to 30 and is moving into oversold territory.
Historically, RSI prints under 30 on ETH have produced sharp counter-trend rallies. However, these rallies typically reset earlier than the broader pattern resumes. Therefore, merchants ought to look ahead to a wick into the $1,920 zone adopted by a every day reversal candle.
The setup that might flip the bias bullish is a every day shut above $2,140. That transfer would reclaim the 0.236 Fibonacci stage and open a push by $2,382. Until that occurs, each rally fades contained in the descending channel.
A bounce from $1,920 on rising quantity would purchase time for bulls. An in depth under would verify Hoffman’s structural learn on the tape. It would additionally put $1,750 on the desk.
A retest of $1,750 would mark ETH’s lowest print of 2026. It would additionally wipe out months of accrued work by spot holders. Bulls want the $1,920 zone to maintain cleanly to keep away from that state of affairs.
For now, the channel, the on-chain tape, and Hoffman’s thesis kind a coherent bearish stack. None of those indicators is decisive alone, however collectively they stress the identical commerce. Buying ETH here’s a wager that every one three rotate directly.
Watching the $2,140 reclaim stage is the cleanest manner to check whether or not bears or bulls management the following transfer. Until that stage prints on a every day shut, the burden of proof sits with the bulls, precisely as Hoffman’s notice “Why I Sold My ETH” implied.
The submit Was Bankless Founder Right to Sell His Ethereum? On-Chain Data Reveals appeared first on BeInCrypto.
