Ethereum (ETH) Crashes to $2,800: Did ETF Spark Bloodbath?

08/04/2024 18:18
Ethereum (ETH) Crashes to $2,800: Did ETF Spark Bloodbath?

Ethereum in awful position as institutional sell-offs push price below $3,000 once again

Ethereum (ETH) Crashes to $2,800: Did ETF Spark Bloodbath?

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After falling to $3,000, Ethereum has experienced a severe decline. Institutional investors selling off their ETH holdings appear to be the main reason behind this sharp decline. Ethereum's price has dropped sharply as a result of the sell-off.

The daily ETH/USD chart reveals a severe sell-off pattern. A number of significant support levels have been breached by the asset, including the 200 EMA, which usually serves as a solid floor during downturns. The price is continuously dropping below these important indicators, which also show a bearish trend: the 50 EMA and the 100 EMA.

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ETH/USD Chart by TradingView

An important liquidation appears to be the cause of the sell-off as shown by the spike in ETH trading volume. According to the RSI, which has dropped to about 31, Ethereum is oversold. This does not however imply that a swift recovery is approaching, particularly in light of the mood of the market right now.

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ETF holdings sold by institutional investors are probably the cause of Ethereum's sharp price decline. Exchange-traded funds or ETFs have gained popularity as a means of institutional cryptocurrency investment. But as the current price action shows, these investors' large-scale sales have the potential to seriously disrupt the market. Market prices are significantly influenced by institutional investors, who generally handle substantial sums of money.

A domino effect frequently occurs when these entities begin liquidating their holdings, aggravating the price decline as additional investors follow suit. According to the most recent price action, if the sell-off persists, Ethereum may be subject to additional downside pressure.

We might witness a lengthy period of bearish activity if Ethereum is unable to recover this level. Conversely, the RSI's indication of oversold conditions may draw in some buyers searching for a good deal.

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