Ethereum Price Drops to $2,100 as $279M Worth of Tokens Sold by Large Investor

Ethereum’s value took a sharp nosedive to $2,127 on August 5, marking a substantial 61% drop within just one week. Market data points to a significant sell-off from Ethereum ETFs and a major crypto trading firm as key factors accelerating the downward trend of ETH.

The decline in Ethereum’s price to a new low in 2024 was part of a broader downturn in the cryptocurrency markets on Monday, August 5, 2024. This downward spiral was triggered by various bearish catalysts that emerged starting from around August 2. The release of the US Non-Farm Payroll (NFP) data for July 2024 by the US Bureau of Labor Statistics revealed a surge of 114,000 in unemployment claims for July, contributing to negative investor sentiment. The Federal Reserve’s decision to pause rates during the FOMC meeting on July 31 further fueled bearish sentiments.

Interestingly, Ethereum experienced more substantial losses compared to other major cryptocurrencies like Bitcoin and XRP during this period. Ethereum’s performance lagged significantly behind the industry average, painting a bleak picture for the digital asset.

Analyzing the chart data, Ethereum’s price plummeted by 60.58% as it dipped to $2,127 on August 5, while the global crypto market capitalization only decreased by 30.90%. The disproportionate decline in Ethereum’s value compared to the broader market indicates a dominant internal bearish catalyst, with reports attributing the dramatic drop to large sell-offs by whale investors.

Jump Trading, a major crypto trading firm, played a significant role in exacerbating the bearish market sentiment by offloading Ethereum coins worth $279.7 million since July 25. This strategic sell-off, along with negative net flows from Ethereum ETFs, intensified the downward pressure on Ethereum’s price.

These events led to retail investors and derivatives traders closing their ETH positions, resulting in Ethereum experiencing larger losses (60.58%) compared to Bitcoin (30%) and XRP (26%) between July 29 and August 5.

Despite a rebound above $2,400 on August 6, Ethereum faces a challenging path to reclaiming the $3,000 level. Technical indicators suggest increased selling pressure, with the Bollinger Bands signaling significant volatility. The Balance of Power indicator indicates that sellers still dominate, requiring a shift for bulls to gain momentum.

In summary, while Ethereum’s recent recovery offers hope, overcoming resistance levels and shifting the market’s balance of power are crucial for establishing a sustainable uptrend towards the $3,000 mark. Investors are advised to conduct thorough research before making any investment decisions.