Ethereum’s Steep Decline Triggers Alarm, Drops Below $3400 Mark

Ethereum, the second-largest cryptocurrency by global market cap, recently took the cryptocurrency realm by storm. Today, its price nosedived nearly 4.84%, dropping to $3,312. This drop, coupled with a weekly plunge of roughly 8%, has left crypto market traders and investors stunned, birthing speculations surrounding the turbulent landscape of crypto.

Following ETH’s recent scaling of $4k in the past 30 days, this drop comes riding a plethora of reasons that triggered a bearish market trend for Ethereum. Here’s a comprehensive analysis of the potential reasons that may have triggered the world’s second-most popular crypto’s recent slump.

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Key Reasons Behind ETH Dip

Ethereum’s sudden and abrupt slip could be attributed to a whirlwind of factors that cast a shadow on investors’ confidence. A few of them are-

ETH Exchange Inflow Surges With Regulatory FUD Rise

Ethereum jotted its largest weekly exchange inflow today, ever since September 2022. Worth a whopping $720 million, this weekly inflow mirrored rising investor FUD, as a potential ETH ETF in the legal chatter painted an enigmatic scenario across the market.

Ali Martinez, a prominent crypto market analyst, further spotlighted $1.47 billion worth of ETH exchange inflow recorded in the last three weeks. This collectively added a tint of bearishness to Ethereum, suggesting a combination of selling pressure, profit-taking behaviors, and negative market sentiments, aligning with the token’s recent price action.

Derivatives Data Flags Bearish Trend

According to the derivatives data unveiled by Coinglass, ETH noted a substantial drop in its open interest, volume, and OI-weighted funding rate, falling in line with today’s slump. Open interest dropped 2.98%, reaching $13.01 billion, whereas volume dropped 38.87%, reaching $39.29 billion.

This showcased a substantial drop in new money entering the token’s derivatives market, further accompanied by reduced market activity. Coupled with the OI-weighted funding rate of 0.0191%, bears’ control in the market validated ETH’s today’s fall.

Crypto Market Liquidation

Meanwhile, the crypto market witnessed substantial liquidations in the past 24 hours, with 82,047 traders facing liquidation totaling $223.23 million. Notably, OKX witnessed the largest liquidation order valued at $1.76 million on OKX – ETH-USDT-SWAP.

Simultaneously, Ethereum took the hit, with liquidations reaching $49.16 million over the past 24 hours, primarily from long traders at $32 million and short traders at $17.16 million. This considerable liquidation further fueled the bearishness on Ethereum, mirroring the crypto realm’s heightened volatility.

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Ethereum’s Market Dynamics

Trading View’s data spotlighted that a selling sentiment currently prevails for ETH in the market. Accompanied by an RSI hovering at 45 a lack of buying interest in the market persists, potentially hinting at a downtrend. This further indicates a potential decrease in price moving ahead, although the current bearish landscape painted by Ethereum falls in line with this data.

Concurrently, ETH’s market capitalization and 24-hour trading volume dipped by 4.88% and 16.64% respectively to $398,294,964,857 and $19,928,788,604 reflecting the cautious sentiment in the market.

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