Ethereum (ETH) experienced a sharp decline today, falling by 8% to a low of $2,991 before slightly recovering to trade at $3,017. This move has left many traders questioning whether the cryptocurrency can stage a meaningful recovery in the near future.
The downturn began on Friday, triggered by unexpected U.S. economic data. Rising concerns over inflation, along with the possibility of the Federal Reserve maintaining higher interest rates for longer, have unsettled markets. These fears were compounded by a stronger-than-expected U.S. jobs report, which showed an additional 256,000 positions added to the labor market—far surpassing the anticipated 160,000. This data indicated a robust economy, but it also led to an uptick in U.S. bond yields, which, in turn, pressured risk assets like cryptocurrencies.
The higher bond yields, particularly the U.S. 10-year Treasury yield, have been weighing heavily on global markets, including Ethereum. In response to the economic reports, ETH dropped from $3,332 to $3,196, continuing its gradual slide in the days that followed.
Despite a significant increase in open interest—up 110% since August 2024—Ethereum’s price remains more than 20% below its all-time high (ATH), leading some to dub it a ‘cursed coin’ among traders.
Technical analyst Ali Martinez recently tweeted that Ethereum faces resistance between the $3,360 and $3,450 range, with key support levels around $3,066 and $3,160. Martinez also highlighted that three major whale wallets now control 43% of Ethereum’s total supply, a factor that could play a significant role in future price movements.
Benjian Cowen, CEO of IntoTheCryptoverse, weighed in on Ethereum’s supply dynamics, noting that the monthly increase of 45,000 ETH will likely push the supply back to pre-merge levels soon. Currently, Ethereum’s supply is just 32,000 ETH shy of its pre-merge total. Meanwhile, data from Lookonchain suggests that large holders—whales—are continuing to accumulate Ethereum. Just recently, a whale withdrew 10,000 ETH, valued at approximately $30.76 million, from Binance.
Furthermore, data from IntoTheBlock reveals a surge in large transactions, with a 70.2% increase in transactions over $100,000. Netflows on exchanges also rose dramatically by 791.5%, indicating heightened market activity.
In conclusion, a combination of tightening liquidity and the recent U.S. economic data has placed considerable pressure on Ethereum, with its price showing signs of further declines in the short term.
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