Amidst a market downturn, Ethereum's metrics are in decline, marking an 8.65% drop over the past week and a 5.90% fall in 24 hours. The loss of support below $3,460 poses a challenge for Ethereum's bulls, with analyst Ali Martinez predicting a potential drop to $2,850 if the slump continues. The majority of ETH holders (~66%) are out of the money, indicating further downside risk. Internal uncertainties, including an alleged probe into the Ethereum Foundation and doubts over a spot Ethereum ETF, are also weighing on sentiment.
Ethereum's Downward Spiral Raises Concerns Amid Market Uncertainty
In a troubling turn of events, Ethereum (ETHUSD) has plummeted amidst a broader market downturn, eroding investor confidence and raising questions about its future trajectory. As of press time, Ethereum has nosedived by 5.90% in the past 24 hours, sinking to $3,338.93. This latest dip has extended its weekly decline to a staggering 8.65%.
Market analysts have expressed alarm over Ethereum's deteriorating technical indicators, suggesting that the cryptocurrency lacks substantial support along its downward path. Ali Martinez, a renowned market expert, has cautioned that Ethereum's inability to maintain its support at the $3,460 level poses a significant threat to its bulls. Martinez warns that if the downward momentum continues unchecked, Ethereum could potentially plunge to as low as $2,850.
Martinez's analysis, supported by data from IntoTheBlock (ITB), reveals a precarious situation for Ethereum investors. According to the data, a massive 4.97 million ETH, worth approximately $16.68 billion, is currently in the money (or in profit), representing 33% of the total ETH in circulation. However, the recent price drop has forced 10 million ETH, valued at $33.52 billion, or 66.31% of the circulating supply, out of the money. For Ethereum to regain its profitability equilibrium, its price would need to trade within the tight $3,252.30-$3,352.58 range.
In addition to external market factors, Ethereum is also grappling with its own internal uncertainties. The recent probe into the Ethereum Foundation by an undisclosed state authority has cast a shadow over the project, dampening investor sentiment. Moreover, skepticism lingers regarding the prospects of a spot Ethereum ETF, given the United States Securities and Exchange Commission's (SEC) reported inclination to classify ETH as a security.
While the likelihood of ETF approval has diminished, industry leaders such as BlackRock's Larry Fink remain cautiously optimistic. Fink believes that even if ETH is designated as a security, it would not significantly hinder the chances of ETF approval.
Despite these glimmers of optimism, Ethereum's current predicament raises serious concerns about its short-term viability. The lack of price support, coupled with regulatory uncertainties, has created an environment of fear and doubt among investors. Whether Ethereum can weather this storm and emerge stronger remains to be seen, but the road ahead looks increasingly challenging.
