Is A Steep Correction Ahead for ETH Price?

After a sharp downturn on Monday, Ethereum (ETH) briefly stabilized on Tuesday, only to face another threat. This turbulence resulted from a wallet seemingly linked to the Ethereum Foundation choosing to sell a portion of its allocated tokens, causing widespread panic.

Consequently, Ethereum price slipped by approximately just over 2% within a few hours. This sudden decline came as a surprise to many, leaving traders scrambling to react. Monday was a particularly brutal day for cryptocurrency traders, as the market witnessed a dramatic sell-off. As a result, over $100 million worth of liquidations occurred, primarily affecting long positions—those who had bet on price increases.

Notably, the chaos also unfolded against the backdrop of escalating tensions in the Middle East, where Israel’s conflict with Hamas and increasing regional turmoil rattled investors, impacting risk assets across the board.

Ether’s Imminent Danger

However, even as Ethereum seemingly stabilized on Tuesday, concerns continued to loom. Prominent crypto analyst Ali Martinez issued a warning via Twitter, cautioning that Ethereum was precariously perched above a critical demand zone.

“Ethereum is hovering above a critical demand zone. Keep a close watch, as a daily close below $1,530 could signal a steep correction ahead for ETH,” Martinez wrote.

He emphasized the importance of monitoring the situation closely, highlighting that 1.59 million address bought $1.92 million ETH worth $2.9 billion along this area in the past.

Earlier on Monday, Martinez pointed out that since February 2023, Ethereum whales had been capitalizing on surging prices, offloading or redistributing over 5 million ETH, which translates to approximately $8.5 billion. According to the pundit, what is particularly striking is that this trend of selling has persisted, with no current indications of a shift towards Ethereum accumulation.

That said, it’s important to note that Ethereum has found itself under a shadow of negativity in recent times. From Vitalik Buterin’s sale of his coins to the growing concerns within the cryptocurrency community regarding Ethereum’s apparent centralization within its staking pools, these factors that have been exerting significant downward pressure on its price.

At press time, Ether was trading at $1,585 after a 0.45% drop over the past 24 hours.