Ethereum
Why Ethereum Price Is Down Today? Analysis of ETH Price Correction After ETF Launch
Ethereum (ETH) fell 1.8% on Wednesday despite the Successful launch of ETH ETFswho attracted $10.2 billion in assets and saw net inflows of $107 million. The second-largest cryptocurrency by market cap is struggling, breaking below important support levels. The question is: Is Ethereum ready to retest the critical $3,000 support level by the end of July?
Historically, a fall before a rise
According to 10X research reportThe initial excitement surrounding the Ethereum ETF launch has faded, leading to what historically becomes a “sell the news” scenario. This pattern has been observed during similar events in December 2017, April 2021, October 2021, January 2024, and now July 2024. This pattern often suggests that after the launch hype, a market correction follows.
What is the cause of this selling pressure?
The report also highlights the poor timing of the ETF launch, which coincided with the Bitcoin distribution of Mount Gox
Mt. Gox Centralized Exchange
This adds additional selling pressure to the cryptocurrency market. Additionally, the US tech earnings season has gotten off to a rocky start, with companies like Alphabet and Tesla selling off massively. With 40% of the market cap set to report results next week, a conservative outlook due to weakening consumer spending could further impact the market.
Additionally, Ethereum appears particularly vulnerable in current market conditions. Its fundamentals, including new user growth and revenue, have stagnated. Ahead of the ETF launch, 10X Research noted that Ethereum was overbought, suggesting it was ripe for a short trade — a view supported by a 6% decline since the report.
Prepare for short-term travel
On Wednesday, Ethereum was trading around $3,420, down 1.8% on the day. data ETH price has dropped by $14.15 million in 24 hours, with bearish sentiment prevailing as indicated by ETH’s Long/Short ratio dropping to 0.91. Similar to Bitcoin’s behavior after its launch, Ethereum could experience a brief decline before a potential rebound. Currently, the RSI level is hovering below the midline, suggesting that bears have an advantage in controlling the current trend.
Technical indicators point to a possible decline towards the $3,203 support level before a potential rise towards the $3,731 resistance.
On Thin Ice! ETH Could Drop to $3,000?
Ethereum could test the resistance at $3,400 if the market regains momentum, potentially targeting $3,730 in the coming weeks. Conversely, if the bearish trends continue, Ethereum could fall towards its crucial support level of $3,000 this month.
Advice to investors
In short, analysts suggest buying Bitcoin and selling Ether to ETH traders. You can sell Ether options to pay for Bitcoin options. This strategy takes advantage of the current market situation, focusing on the potential rise of Bitcoin and hedging against Ether volatility.