As an experienced analyst, I’ve seen my fair share of market fluctuations, and the recent dip in Ether’s price below $2,900 is a cause for concern. The entire crypto industry took a hit last week, with the market cap falling below $2 trillion, a significant decline from its previous highs.
As a researcher studying the cryptocurrency market, I’ve observed that Ether dipped below the $2,900 mark last week, and it has been hovering around $3,000 in recent days. This price drop has left Ether holders feeling uneasy about the near future, with several voices in the community expressing their belief that the bull market may have reached its conclusion.
Despite the anticipated approval of a spot Ether ETF in the US, there’s a significant drop in market interest for the asset. Many traders believe that the price will continue to decrease, despite expectations of an SEC approval this month.
Despite Ether’s value decrease not being an isolated event for the second largest crypto asset, the entire crypto market experienced a downturn. The total crypto market capitalization dropped below $2 trillion last week before rebounding. This decline has raised concerns among traders across the industry. It was caused by bitcoin‘s value plummeting to new lows due to incidents involving Mt. Gox and the German government.
This month marked the initiation of Mt. Gox’s reimbursement process, with creditors slated to receive approximately 140,000 bitcoins. Consequently, this significant influx of bitcoin into circulation was anticipated to cause fluctuations in its price, which had been on an upward trend prior to the downturn in June. Similarly, Germany’s massive bitcoin sales in the millions of dollars have intensified selling pressure, contributing to the persistent downward trend in bitcoin’s price.
With Bitcoin experiencing a significant decline in value, other cryptocurrencies such as Ether have followed suit. Market players express concern as large quantities of Bitcoin are anticipated to enter the market in the upcoming weeks and months, potentially exacerbating current market downward trends.
Ether traders’ optimism has dwindled based on their actions in the derivatives market. During bull markets, the extra cost for entering into Ether futures contracts ranges from 5% to 10%. However, this premium reached a notable high of 11% just a few weeks ago. More recently, it has decreased to 8%. While this decline isn’t concerning on its own, it does reflect the decreasing enthusiasm among Ether traders.
Regardless, anticipation about how the asset will move with spot ETFs hitting the market exists.
Image by Dean Crosby from Pixabay
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2024-07-09 12:52