The post Ethereum whales target the dip, but here’s why ETH can slide to $2.3K appeared on BitcoinEthereumNews.com.

Ethereum whales jumped on the “dip” as prices slid to $2.3K.  Despite a slight rebound, uncertainty still looms. Ethereum [ETH] was grappling with its toughest market cycle yet, posting a weekly decline of over 6%. As the worst performer among the top five altcoins, this downturn prompts critical questions about its future. Faced with increasing competition from Solana [SOL] and evolving market dynamics, Ethereum’s resilience will undergo a significant test in the coming weeks, especially as there is… Too much leverage in the market Historically, a spike in the Margin Lending Ratio has triggered forced selling, resulting in a price decline until the ratio returns to normal levels. Source: Hyblock Capital In simpler terms, when this ratio rises sharply, it signals that too many traders are borrowing to bet on higher prices, which often leads to a market pullback. This trend serves as a warning for traders to trade carefully, as it usually precedes a market correction. Recently, the ratio surged from 38 to 72, indicating heavy borrowing of USDT. While long positions can indicate bullish sentiment, they can also create problems, particularly in a volatile market. If prices begin to fall, traders who borrowed funds may need to sell their assets quickly to cover their loans, causing further price drops. This pattern has been observed before, where a sudden rise in borrowing signals potential near-term trouble. Therefore, Ethereum might be poised for further declines if bulls fail to step in and support the price. Ethereum is near a crucial support line In a recent post on X (formerly Twitter), Santiment pointed out a vital development that could help Ethereum avoid a retracement.  Trading at $2,468 at press time, ETH has hit a significant support line that has been tested four times in less than two months. This repeated testing…

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Filed under: News - @ October 26, 2024 8:02 pm