Ethereum (ETH) has seen a significant drop in price, falling to $1,540 in the past 24 hours, marking the first time it has reached this level since March 12, 2023. This decline can be attributed to the recent surge in bearish sentiment, particularly due to the impending FTX asset liquidation, which is set to inject approximately $192 million worth of Ether into the market. However, this recent dip in Ether’s price had been anticipated for some time, especially after the crypto bear market rally encountered obstacles in the latter half of the year.
Analyzing Ethereum’s price action, the market intelligence platform Santiment suggests that bearish forces may continue to gain momentum in the weeks ahead. Santiment’s analysis points to the movement of significant quantities of stagnant Ether in recent days, indicating that bears might gain an advantage. This aligns with the common observation that asset prices tend to decrease when the mean dollar age decreases.
How Far Can Ether Price Drop?
Ethereum’s price has been disappointing for many long traders who had hoped for a rally above $2,120 following the Shanghai upgrade earlier this year. Given the confirmed bearish trend in August, it’s likely that Ethereum’s price will continue to decline, possibly reaching the bear market lows of around $1,000 seen in 2022. However, Ethereum, known as the leader in smart contracts and the DeFi ecosystem with a total value locked (TVL) of over $20 billion, might find temporary support around $1,372.
As long as the weekly death cross between the 50-day and 200-day moving averages remains in place, Ethereum’s price is expected to remain trapped in a bearish sentiment.