Ethereum
Why Did Ethereum Fall Below $3,000 Today? Whales, Liquidations, and More…
- Mt. Gox has begun repaying creditors who suffered losses in its 2014 collapse
- Ethereum fell to an intraday low of $2,825 and appeared to be on track to hit 4 consecutive daily red candles, at press time.
Bitcoin, the world’s largest cryptocurrency, fell to its lowest level since February earlier today as the market reacted to news of activity around a wallet linked to Mt Gox. In fact, the magnitude of the crash was such that BTC fell below $55,000 on price charts, down more than 9% on weekly charts.
But he was not alone, with Ethereum taking the lead over BTC. It also saw deeper losses, with ETH falling below $3,000 to hit an intraday low of $2,820.
Whale activity also contributed to the losses
Ethereum’s free fall also appears to have been exacerbated by whales selling large amounts of Ethereum (ETH) to repay debts on their bad bets.
In fact, on-chain data resource LookOnChain found that the ETH price decline posed liquidation risks to Ethereum whales buying ETH via Aave and Compound. For example, the tool tracked an address selling 26,600 ETH to repay a debt on Aave in a job on X.
Liquidations
As expected, the bloodbath in the markets on Friday resulted in the liquidation of nearly $650 million worth of cryptocurrencies, including $537 million in bullish bets, in just 24 hours.
Source: Coinglass
Over $130 million worth of ETH long positions were forcibly closed in the 24 hours prior to press time.
Source: Coinglass
At the same time, the total open interest (OI) of ETH futures contracts on major exchanges also decreased by almost 12% during the aforementioned period, a sign that funds are leaving the market.
Source: Coinglass
Finally, Ethereum’s CME OI also fell by 7.59%, confirming the bearish sentiment among investors as a whole.
Technical analysis of the ETH/USDT pair
ETH/USDT’s losses, which have now extended into a fourth day, have increased pressure on the pair. Due to this, the pair broke through key support levels at the height of the crisis. ETH price has broken below the 50, 100, and 200 simple moving averages on the daily chart.
Source: TradingView
The last time ETH/USDT fell below all three trendlines on the daily time frame was in August 2023. At the time, the cryptocurrency market suffered losses sparked by reports that Elon Musk’s SpaceX was selling its Bitcoin holdings.
ETH was last spotted trading at $2,920, 40% below its all-time high, according to CoinMarketCap. Ethereum’s mixed performance This week also reinforced the short-term bearish outlook.
Source: TradingView
The ETH/USDT pair is now positioned to face resistance around the $3,200 level, which it previously battled between mid-April and mid-June.