Ethereum Price Hits 8-Week Low at $2,600, ETH Holders Face Heavy Losses
The recent plunge in Ethereum's price has caused a stir among investors as it dropped to an eight-week low of $2,600, resulting in significant losses for ETH holders. However, institutional players are viewing this downturn as an opportunity to buy in at lower prices, anticipating a potential market rebound.
Loss of Momentum for Ethereum
Ethereum has seen a sharp decline in its supply in profit, plummeting by 32% in the last two months. Previously, 97% of ETH holders were in profit, but that number has decreased to just 65%, reflecting a negative sentiment in the market. Ethereum's underperformance compared to other large-cap cryptocurrencies has raised concerns among traders.
Fear, uncertainty, and doubt (FUD) have driven retail investors to sell off their holdings, adding to the downward pressure on Ethereum. However, market dynamics suggest that unexpected reversals could occur, especially if the broader crypto market stabilizes. This could lead to surprise upticks in Ethereum's price as long-term investors seize the opportunity presented by discounted prices.
Institutional Interest in Ethereum Unfazed
Despite the recent price decline, institutional investors are showing interest in accumulating Ethereum. The US spot Ethereum ETF market witnessed its highest daily inflow in two months, with a total of 89,290 ETH valued at around $236 million entering funds earlier this week. This influx indicates that institutional players find Ethereum's current pricing attractive for investment.
The continuous accumulation by institutions at lower levels signals enduring confidence in Ethereum among long-term investors. While short-term price fluctuations may persist, ongoing institutional support could offer a cushion for ETH, potentially stabilizing its price in the upcoming weeks.
Price Predictions for ETH: Towards Recovery
With a 20% decrease in price over the past week, Ethereum is currently trading at $2,608, holding above the crucial support level of $2,546 after losing the $2,698 support. This downward trend has left ETH vulnerable, prompting investors to closely monitor price movements for further indications of market direction.
The current market conditions present a mixed outlook, leaving Ethereum vulnerable to extended consolidation below $3,000. A potential recovery could kick in if ETH manages to reclaim the $2,698 support level, potentially ushering in a positive momentum shift.
However, failure to maintain the $2,546 support could deepen the downtrend, pushing Ethereum towards $2,344 and undermining the bullish to neutral outlook, leading to additional losses for investors. This scenario could prolong the bearish sentiment, delaying any notable recovery in the short term.