On September 12, Ethereum (ETH) slipped below the $ 170 mark to fall to $ 166 to hit a low this year.
Since then, within a period of 30 days, the ETH has shown promising choices in volume and momentum, rebounding from $ 166 to $ 230. Last week, on September 23, Ethereum prices reached $ 255.
The sudden growth of the ICO market in mid-2017 prompted many analysts to speculate that the decline in ETH prices was largely triggered by the sale of Ethereum's ownership by blockcain projects that had raised millions of dollars through the public by selling tokens.
Diar, the cryptocurrency research group, revealed in his weekly report that the ICO still had more than 38 percent of the amount raised in the sale of their tokens. At that time, based on Diar's findings, analysts speculated that if the ICO decided to liquidate the remaining ownership of their ETH, Ethereum prices could drop further than the low support level.
"There is a big misunderstanding that ICO companies have liquidated most of their ETH ownership. On average, all of these projects have moved or been liquidated 62 percent of the amount they originally raised. In other words, they still hold 38 percent of the amount originally raised. This, in turn, creates selling pressure for ETH, which is unlikely to disappear in the near future, "said the editor-in-chief of Diar Larry Cermak.
However, on October 1, BitMEX Research, a subsidiary of the BitMEX cryptocurrency exchange, released a study entitled "Ethereum Ownership in ICO treasury accounts," listing ICO ownership and balance sheet estimates of major blockchain projects.
The BitMEX Research Newspaper stresses that most ICOs liquidate their ownership when the ETH price is still at a high point to finance development and operations. Therefore, the recent fall in ETH prices cannot be fully attributed to the selling of ETH by blockchain projects.
"We conclude that ICO treasury accounts have a much lower exposure to Ethereum prices than many people might think," the BitMEX team wrote. Enough what this means for Ethereum prices going forward is unclear, but we believe we have shown the thesis "panic selling" wrong or will only occur at a lower level than expected.
From April to September, the ETH price dropped from $ 780 to $ 200, by 74 percent. In the same period, Ripple (XRP) prices fell from $ 1 to $ 0.25, more than 75 percent. In mid-September, XRP began an impressive corrective rally and recorded a doubling in value.
The ETH also initiated a corrective rally because the market showed oversold conditions, but the recovery was not as strong as Ripple.
Although ETH and XRP experienced the same downtrend tendency in the last five months, the decline in ETH prices was caused by ICO sales while XRP downtrend was associated with normal market movements.
It is likely that both ETH and XRP decreased by around 75 percent just because the market experienced a major correction and the tendency of the ETH to decline was not caused by the selling of the ICO.
