Ethereum (ETH) has experienced a significant decline, dropping below $3,400 as the broader cryptocurrency market faces bearish sentiment. This coincides with Bitcoin (BTC) falling below $96,000, resulting in a market cap drop below $2 trillion for Bitcoin.
Despite these challenges, Ethereum's valuation remains around $400 billion. The question is whether the $3,035 support level will hold as selling pressure intensifies. Over the past week, Ethereum has seen a sharp decline of 12.44%, with three consecutive bearish candles indicating a persistent downward trend. This began after facing resistance at $4,100 and breaking below the 50-day Exponential Moving Average (EMA). Currently, Ethereum is testing the critical $3,400 support level, with the market price around $3,404. The daily Relative Strength Index (RSI) has dipped below the halfway mark, approaching oversold territory, and momentum indicators suggest increased selling pressure.
Institutional outflows have impacted Ethereum Exchange-Traded Funds (ETFs), with a significant outflow of $60.47 million. Grayscale, a major player in cryptocurrency investment, has offloaded $58.13 million worth of Ethereum. This has halted the bullish momentum in the Ethereum ETF market, raising concerns about institutional interest in Ethereum. On the other hand, whale activity has increased as price volatility rises. Donald Trump's World Liberty Finance purchased 722 ETH tokens for $2.5 million, indicating a bullish outlook. However, other whales are reportedly liquidating their holdings to repay debts. One whale deposited 22,746 ETH tokens valued at $77.7 million to Binance, while another transferred 31,968 ETH tokens worth $122 million in just two days. Additionally, a separate whale deposited 49,910 ETH tokens, amounting to $170 million, with plans to convert them into stablecoins valued at $137.8 million.
Technical analysis suggests that the 200 EMA at $3,035 is a crucial psychological support level for Ethereum. If the price continues to decline, the 50% Fibonacci retracement level at $2,942 could act as a potential bounce-back zone. If the broader market recovers, Ethereum's price may challenge the 78.60% Fibonacci level at $3,530. Fading institutional support and diminishing retail demand exacerbate the ongoing bearish trend, potentially amplifying selling pressure. The interplay between whale activity, institutional sentiment, and technical indicators will be crucial in determining Ethereum's trajectory in the coming days. Overall, Ethereum's recent price movements have significant implications for both retail and institutional investors, and its ability to maintain critical support levels will shape its future performance.