The recent crypto market correction has pushed the Ethereum price to drop 37% in the past six days. This development comes amid recession fears. The sell-off is not localized to the cryptos and can also be seen in the stock markets. 

Why is Ethereum Price Crashing?

Ethereum price followed Bitcoin’s footsteps and has crashed 37% since July 29. Investors expected ETH’s price to rally higher due to the spot Ether ETF approval but were caught off guard by the sudden sell-off.

The Fed’s decision to keep interest rates high, weak jobs data, and the Bank of Japan’s sudden rate hike in the last week of July are three macroeconomic drivers of the sudden market correction. Additionally, Sahm and Joshi Rules have flashed “recession” signals, further exacerbating the already bleak situation.

From a crypto standpoint, Jump Trading recently unstaked $46 million worth of Ether and transferred them to centralized exchanges, which is an added headwind for bulls.

Read more: Reasons Why Bitcoin Price Crash Could Continue

What can ETH holders expect?

From a technical standpoint, Ethereum price is retesting the $2,190 and $1,927 support levels. If the macroeconomic situation stabilizes, investors can expect a bounce here. However, if the outlook worsens, Ethereum price forecasts that ETH could drop lower and retest the $1,627 support level. 

Since July 29, Ethereum whales holding between 100,000 to 1,000,000 ETH have offloaded 430,000 ETH. At the current price of $2,267, these institutional holders have sold roughly $974 million worth of ETH in just eight days.

Investors must be cautious about buying the dips or catching the knife as the markets could continue sliding lower. If the recession fears come true, then Ethereum price has a lot more weight to shed. In addition to crypto, other risk assets like the equities will reflect similar outlook. 

The post Why Ethereum Price is Dropping? appeared first on CoinGape.

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Filed under: News - @ August 5, 2024 1:21 pm