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Cryptocurrency News Articles
Has Ethereum's Reign as the Second-Largest Crypto Ended?
Mar 22, 2024 at 10:01 pm
Has Ethereum's Reign Ended?
Ethereum, the cryptocurrency that once commanded the second spot in global market capitalization, has recently stumbled, with its price plummeting nearly 4% to a mere $3,409. This sudden dip, coupled with a weekly plunge of approximately 8%, has left the crypto market scratching its head, wondering what went wrong.
Unraveling the Enigma: What Triggered Ethereum's Downturn?
Ethereum's recent rise to $4,000 within the past month has now been overshadowed by a plethora of factors that have sent it spiraling downward. Let's delve into the potential culprits behind this crypto heavyweight's sudden slump:
Exchange Inflows Surge Amidst Regulatory Jitters
Ethereum's exchange inflows have reached their highest weekly level since September 2022, amounting to a staggering $720 million. This influx of tokens onto exchanges coincides with rising investor concerns over the potential regulatory landscape surrounding ETH. The mere whisper of an ETH ETF has created a cloud of uncertainty, fueling fears and selling pressure.
Crypto market analyst Ali Martinez has also pointed to a massive $1.47 billion worth of ETH exchange inflows recorded over the past three weeks. This has cast a bearish shadow over Ethereum, indicating a combination of selling pressure, profit-taking, and overall negative market sentiment.
Derivatives Data Paints a Grim Picture
Derivatives data from Coinglass reveals a significant decline in Ethereum's open interest, volume, and OI-weighted funding rate, mirroring today's slump. Open interest has dropped by 2.98%, reaching $13.01 billion, while volume has plunged by 38.87%, reaching $39.29 billion.
This suggests a sharp reduction in new money entering the token's derivatives market, coupled with diminished market activity. The OI-weighted funding rate of 0.0191% further validates the bearish sentiment that has gripped the market, contributing to Ethereum's fall.
Crypto Market Liquidation Adds Fuel to the Fire
The crypto market has witnessed a wave of liquidations over the past 24 hours, with 82,047 traders facing the music, totaling $223.23 million. Notably, OKX recorded the largest liquidation order, valued at $1.76 million on the OKX – ETH-USDT-SWAP.
Ethereum bore the brunt of these liquidations, with $49.16 million wiped out in the past 24 hours. This liquidation frenzy, primarily from long traders, has further fueled the bearishness surrounding Ethereum, reflecting the heightened volatility that has engulfed the crypto realm.
Market Dynamics: Ethereum's Bleak Outlook
Trading View's data paints a sobering picture for ETH, with selling sentiment currently dominating the market. The Relative Strength Index (RSI) hovering around 45 indicates a lack of buying interest, hinting at a potential downtrend. This further suggests that Ethereum's price may continue to slide, aligning with the bearish landscape it currently faces.
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