While Ether's price is just a step away from reaching a new all-time high, the Ethereum Foundation has begun gradually selling its holdings. This move certainly raises some eyebrows and prompts questions about the organization's strategic intentions. At first glance, it might seem more logical to take advantage of the favorable market conditions and maximize returns, rather than offload assets ahead of a potential rally.

However, from another perspective, it becomes clear that the Ethereum Foundation is likely pursuing more pragmatic goals. First, diversifying its assets can reduce risks associated with heavy reliance on a single cryptocurrency. Second, the proceeds could be used to fund further development and research, which would strengthen Ethereum's position in the long term.

According to data, the foundation sold no less than 2,795 ETH yesterday, worth around $12.7 million. A Lookonchain report stated that wallet "0xF39...E4B," linked to the Ethereum Foundation, sold 1,695 ETH late Tuesday at about $4,556 for $7.72 million. About an hour later, it sold another 1,100 ETH at $4,602.

The wallet, which originally received 20,756 ETH back in 2017, now holds 99.9 ETH worth about $457,681 and 11.6 million DAI.

The Ethereum Foundation's actions coincided with a strong rally in Ether's price: the cryptocurrency broke above $4,500, its yearly high.

Currently, Ethereum is outpacing Bitcoin in price growth since the start of the year, helped by a recent wave of corporate buying and a significant inflow of funds into spot Ethereum exchange-traded funds (ETFs). This phenomenon has certainly drawn attention from investors and analysts, who are questioning whether this marks the start of a new era for the second-largest cryptocurrency by market capitalization. One of the key drivers of Ethereum's growth is its role in the development of decentralized finance (DeFi). The Ethereum ecosystem serves as the foundation for numerous innovative projects, making it attractive to companies seeking to integrate blockchain technology into their operations.

The inflow of funds into spot Ethereum ETFs also significantly impacts the price. These funds provide institutional investors with the opportunity to gain exposure to Ethereum without directly holding the cryptocurrency, opening access to a broader audience and increasing demand.

Trading recommendations:

For Bitcoin, buyers are now targeting a return to $120,700, which would pave the way towards $122,350 and bring the $124,200 level within reach. The ultimate upside target would be the $125,200 high, a breakout above which would signal further bullish market strength. If Bitcoin falls, buyers are expected to emerge around $118,800. A drop below this area could quickly send BTC towards $117,500, with the ultimate downside target being $115,600.

For Ethereum, a clear hold above $4,700 would open the way to $4,898. The ultimate upside target would be the $5,055 high, a breakout above which would renew buyers' interest. If Ether falls, buyers are expected around $4,532. A drop below this area could quickly send ETH towards $4,363, with the ultimate downside target being $4,216.

What we see on the chart:

Red lines mark support and resistance levels, where price is expected to either slow down or accelerate.

Green lines mark the 50-day moving average.

Blue lines mark the 100-day moving average.

Light green lines mark the 200-day moving average.

A price test or cross of these moving averages often halts the current move or gives the market a fresh impulse.