Key Takeaways
- Tom Lee attributed Ethereum’s late-December price weakness to automated trading activity and year-end tax losses.
- Despite the downturn, BitMine continued accumulating Ethereum, adding 44,463 ETH.
- Analysts warn Ethereum remains vulnerable to further downside.
BitMine’s Tom Lee said “bots” and year-end tax-related selling were driving Ethereum’s recent price weakness, even as the firm added another 44,463 ETH tokens.
In a post on X, Lee said market conditions in the final days of December are typically distorted as institutional investors step away for the holidays, as Ethereum continues to trade below $3,000.
BitMine Buys Ethereum
Despite the price slump, BitMine said it continued to accumulate Ethereum into the end of the year.
The company said in a statement that it added 44,463 ETH over the past week, taking advantage of year-end selling pressure.
As of Dec. 28, BitMine held about 4.11 million ETH valued at $2,948 per token, representing roughly 3.4% of Ethereum’s circulating supply.
“Market activity tends to slow as we enter the final holiday weeks of a calendar year,” Lee said.
Adding: “Year-end tax-loss related selling is pushing down crypto and crypto equity prices, and this effect tends to be the greatest from Dec. 26 to Dec. 30, so we are navigating markets with this in mind.”
BitMine said its total crypto holdings, cash, and strategic investments now amount to $13.2 billion, making it the largest Ethereum treasury in the world.
Tom Lee’s Ethereum Theory
In a post promoting the latest buy, Lee said the late-December pullback was consistent with seasonal trading patterns.
“Typically, in these last holiday trading days, many institutional investors have stepped away from markets,” Lee said.
That dynamic, he said, leaves markets more heavily influenced by automated trading systems and year-end tax-loss selling.
“As a result, trading is dominated by bots and other automated strategies, along with tax-loss related selling.
“This is the usual dynamic in the final days of December.”
Ethereum Price Outlook
Ethereum was trading below $2,971 on Wednesday, up almost 5% in the last 30 days.
However, analysts say near-term risks remain skewed to the downside.
Victor Olanrewaju, an analyst at CCN, said Ethereum remains vulnerable to declines, pointing to rising exchange reserves as a key concern.
“Despite the uncertainty surrounding Bitcoin’s recent on-chain movements, Ethereum’s price still appears exposed to additional downside risk,” Olanrewaju said.
“When exchange reserves increase, it usually suggests more coins are being positioned for liquidity. Historically, sustained increases in reserves tend to correlate with price weakness.”
Data from CryptoQuant shows Ethereum’s exchange reserves have climbed to their highest level in more than a month.
If the trend continues, Olanrewaju said, Ether could slide toward the $2,500 level.
Kurt Robson is a London-based reporter at CCN, specialising in the fast-moving worlds of crypto and emerging technology. He began his career covering local news in Cornwall after graduating from Falmouth University with First Class Honours in Journalism. There, he cut his teeth on everything from council meetings to missing swans.
He quickly rose through the ranks to become a frontline journalist at several of the UK’s leading national newspapers. Over the years, he has interviewed musicians and celebrities, reported from courtrooms and crime scenes, and secured multiple front-page exclusives.
Following the upheaval of the COVID-19 pandemic, Kurt shifted his focus to technology journalism—just ahead of the AI boom. With a natural curiosity and a trained eye for emerging trends, he has found a new rhythm in reporting on innovation.
At CCN, Kurt's work focuses on the cutting edge of crypto, blockchain, AI, and the evolving digital world. Drawing on his background in people-first reporting and his deep interest in disruptive tech, Kurt delivers stories that are insightful, entertaining, and human-centric.
