Coingape Staff
Ethereum, the second-largest cryptocurrency by global market cap, recently took the cryptocurrency realm by storm. Today, its price nosedived nearly 4%, dropping to $3,409. This drop, coupled with a weekly plunge of roughly 8%, has left crypto market traders and investors stunned, birthing speculations surrounding the turbulent landscape of crypto.
Following ETH’s recent scaling of $4k in the past 30 days, this drop comes riding a plethora of reasons that triggered a bearish market trend for Ethereum. Here’s a comprehensive analysis of the potential reasons that may have triggered the world’s second-most popular crypto’s recent slump.
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Key Reasons Behind ETH Dip
Ethereum’s sudden and abrupt slip could be attributed to a whirlwind of factors that cast a shadow on investors’ confidence. A few of them are-
ETH Exchange Inflow Surges With Regulatory FUD Rise
Ethereum jotted its largest weekly exchange inflow today, ever since September 2022. Worth a whopping $720 million, this weekly inflow mirrored rising investor FUD, as a potential ETH ETF in the legal chatter painted an enigmatic scenario across the market.
Ali Martinez, a prominent crypto market analyst, further spotlighted $1.47 billion worth of ETH exchange inflow recorded in the last three weeks. This collectively added a tint of bearishness to Ethereum, suggesting a combination of selling pressure, profit-taking behaviors, and negative market sentiments, aligning with the token’s recent price action.
Nearly 420,000 $ETH have been sent to #crypto exchanges in the last three weeks, worth around $1.47 billion! pic.twitter.com/mBoiMZJFJT
— Ali (@ali_charts) March 22, 2024
Derivatives Data Flags Bearish Trend
According to the derivatives data unveiled by Coinglass, ETH noted a substantial drop in its open interest, volume, and OI-weighted funding rate, falling in line with today’s slump. Open interest dropped 2.98%, reaching $13.01 billion, whereas volume dropped 38.87%, reaching $39.29 billion.
This showcased a substantial drop in new money entering the token’s derivatives market, further accompanied by reduced market activity. Coupled with the OI-weighted funding rate of 0.0191%, bears’ control in the market validated ETH’s today’s fall.
Crypto Market Liquidation
Meanwhile, the crypto market witnessed substantial liquidations in the past 24 hours, with 82,047 traders facing liquidation totaling $223.23 million. Notably, OKX witnessed the largest liquidation order valued at $1.76 million on OKX – ETH-USDT-SWAP.
Simultaneously, Ethereum took the hit, with liquidations reaching $49.16 million over the past 24 hours, primarily from long traders at $32 million and short traders at $17.16 million. This considerable liquidation further fueled the bearishness on Ethereum, mirroring the crypto realm’s heightened volatility.
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Ethereum’s Market Dynamics
Trading View’s data spotlighted that a selling sentiment currently prevails for ETH in the market. Accompanied by an RSI hovering at 45 a lack of buying interest in the market persists, potentially hinting at a downtrend. This further indicates a potential decrease in price moving ahead, although the current bearish landscape painted by Ethereum falls in line with this data.
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The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
