Ethereum’s price has experienced a significant drop, falling over 5% in the past 24 hours. This reversal comes after a month of gains exceeding 60%, driven by factors like DeFi growth and institutional investments. Over $870 million worth of leveraged crypto positions were liquidated, primarily affecting Ethereum, with $210.6 million in losses alone.
The price drop is linked to profit-taking among both institutional and retail investors, adding to selling pressure. Ethereum’s decline coincides with a cooldown in exchange-traded funds (ETFs). Following their strongest week since launch last month, these funds closed the latest session in the red. Over $272 million was withdrawn from some of the largest U.S.-listed Ethereum ETFs alone, further accelerating price correction.
While Ethereum’s short-term performance is volatile, the long-term outlook for ETH remains strong. Technical indicators show ETH holding just above its 20-day EMA at $4,134. This level may act as a crucial support line if it holds against potential further downside. Further price decline could be fueled by bearish momentum and a shift to neutral market conditions.
Investors are cautious, with the Relative Strength Index (RSI) dropping from overbought territory to 58. This suggests a cooling of buying power, and the market may need fresh catalysts for price rebounds. To regain bullish momentum, ETH will likely require reclaiming the $4,500 level, with $4,750 to $4,800 serving as key hurdles before breaking new highs.
The broader crypto market is also experiencing a decline, mirroring Ethereum’s pullback. Bitcoin (BTC) is down about 2.3% and other major altcoins like Solana (SOL) and XRP (XRP) have dropped around 5%. The current downturn reflects the impact of changing macroeconomic factors, particularly uncertainty surrounding Fed Chair Jerome Powell’s speech this week and potential rate cuts.