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The most recent sale of Ether (ETH) has made it possible that he loses the level of crucial support of $ 1,500, and a number of technical indicators suggest that ETH can attend a deeper correction before embarking on a sustained recovery.
The data show that Ether’s price has dropped below its price made – an onchain metric which recalculates the market value of a cryptocurrency according to the price at which each piece moved for the last time on the blockchain.
According to the contributor to the cryptochus, Thekriptolik, Eth Price Trading inferior to this metric, which is historically a lower sign. When the price made is higher than the cash price, it generally acts as a resistance and places “most of the holders suddenly in the loss position”, said the analyst.
The analyst added:
“The decreases below the price made often mark the capitulation phase, where investors lose confidence and start to sell en masse.”
Ethereum made the price of accumulation addresses. Source: cryptocurrency
In June 2022, the price made of Ether fell below the cash price, which preceded a 51% drop in the price of the ETH after the Krach of the Terra Luna market. A similar scenario was observed in November 2022, when the metric fell below the price before Ether drops 35% after the collapse of the FTX.
Now that a similar scenario is taking place, the current configuration echoes these anterior leafy continuation phases, with the price of the eTH at risk of deeper correction.
ETHEREUM ETFE ETFERS continue to weaken, with more than $ 3.3 million in net outings on April 8. In fact, these investment products have recorded $ 94.1 million in outings in the past two weeks compared to $ 13 million at entries.
The lack of interest of investors is worrying, especially since institutional demand was considered as a key element of Ether’s call and played a role in the gains accumulated in May 2024, investors bet on the approval of the ETF of the American Commission for Securities and Exchange.
Table of ETF flows of the spot ether. Source: Wacky investors
This is also reflected in all other ether products, the Coinshares report stressing that the circuits in Ethereum investment funds align with the stock market observed on the market, with $ 37.4 million in outings recorded during the week ending on April 4.
Another factor weighing the price of Ether is the lack of enthusiasm in its derivative market, highlighted by a low open interest and negative financing rates.
Open interest (OI) – The total number of term contracts and current options – is low, indicating a reduction in the participation of trafficking and speculative activity. Currently, at $ 16.7 billion, the metric is 48% below its peak of $ 32.3 billion on January 24.
The decline in the signals of the OI declining the confidence or interest of investors, which can exacerbate the drop in prices as the purchase of pressure dries up.
ETH interest open in all exchanges. Source: Coringlass
Negative financing rates on the perpetual term markets of ether, which oscillate below 0%, indicating that the lowering feeling dominates the market.
In relation: Ethereum Whale sells ETH after 900 days, missing 27 million dollars of profit possible
When the rates become negative, this means that shorts (Paris against the price) pay long to keep their positions open, suggesting a domination of the lowered feeling.
ETH financing rate in all exchanges. Source: Glassnode
The high gas costs of Ethereum offer an opportunity for blockchains of layer 1 competitors focusing on a great scalability to eat in its market share in space. While a fraction of the activity has moved to Ethereum Layer-2 solutions, some users and developers opt for other upper layer 1 alternatives such as the BNB, Solana, Avalanche and Tron chain.
Consequently, the growth of the activity of the Ethereum network has lagged behind that of its rivals.
Top Blockchains classified by volume Dapps 24 hours a day, USD. Source: DAPPRADAR
The unique active active portfolios of Ethereum (UAW) – deal with decentralized applications (DAPP) on the platform – have decreased by more than 33% in the last 30 days compared to a decrease of 16% on Solana and an increase of 16% on Tron.
Likewise, the total number of transactions deployed on the Ethereum network fell 40.5% during the same period, while transactions on the BNB, Solana and Avalanche chain decreased by 16%, 30% and 23%, respectively. TRON and FANTOM transactions increased by 23% and 16%.
Nothing indicates that the factors weighing on the price of Ether – such as the drop in network activity and the low demand for ETF Spot products will reverse any time.
Although this does not guarantee that the price of Ether will remain in a prolonged downward trend, the technical configuration suggests that the price of ETH can be below $ 1,000.
This article does not contain investment advice or recommendations. Each investment and negotiation movement involves risks and readers should conduct their own research when they make a decision.
post url: https://altcoin.observer/3-reasons-why-ethereum-price-continues-to-decrease/