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Ethereum price plunged to $2,127 on Aug 5, down by a staggering 61% within the 7-day timeframe, markets data suggests that a sell-off from Ethereum ETFs and major crypto trading firm had accelerate the $ETH downswing.
Ethereum Price Sees New 2024 Low as JumpTrading Sells $277M $ETH
On Monday, Aug 5, 2024, the cryptocurrency markets experienced a historic downturn attributed to several bearish catalysts.
The downtrend first began around August 2, when the US Bureau of Labor Statistics first published data on US Non-Farm Payroll (NFP) for July 2024. Based on that report, the US recorded a 114,000 surge in unemployment claims for July. This hawkish labor market report further exacerbated investors’ bearish sentiment after the US Fed announced a rate pause during the FOMC meeting held on July 31.
But curiously, market data shows that Ethereum price experienced losses significantly larger than its rival assets like Bitcoin and $XRP. More so, when compared to the broader crypto market average $ETH also performed abysmally below the industry average.
Looking at the chart above we see that $ETH price declined by 60.58% when it slid toward $2127, on Monday Aug 5. Meanwhile, in comparison, the global crypto market capitalization (TOTALCAP) only declined by 30.90%, as it shed $756 billion during the heat of the cascading liquidations.
When a major asset like Ethereum underperforms relative to the broader market trends, it signals the presence of a dominant internal bearish catalyst. Based on recent media reports, Ethereum’s dramatic 60% decline has been linked to massive sell-offs from whale investors.
Ethereum Whale Offloads $279M Amid Market Crash
While Ethereum ETFs recorded negative net flows last week, another major crypto trading firm, JumpCrypto, has also been spotted making a strategic $ETH sell-off, further amplifying the bearish market liquidations.
Since July 25, Jump Trading has sold Ethereum coins worth $279.7 million. Jump Trading currently has approximately 37,600 wrapped staked Ether (wstETH), equivalent to $128 million, along with 21,000 Ether ($ETH), amounting to $61.5 million in their wallet. Additionally, they have around 11,500 Lido-staked Ether (stETH) valued at $33.5 million in the process of being unstacked. These significant movements have added to the bearish sentiment, driving Ethereum’s price down significantly.
These key events played a critical role in $ETH price downtrend on Monday, spooking retail investors and derivatives traders into closing out their $ETH positions. This explains Ethereum price has experience much larger losses (60.58%) compared to rival assets like Bitcoin (30%) and $XRP (26%) between Monday July 29 and Aug 5.
Ethereum price forecast: $ETH Bulls Face Uphill Task Reclaiming $3,000
Ethereum price has rebounded above $2,400 at the time of writing on Aug 6, up 19% from historic lows recorded on Monday. Looking at key technical indicators, Ethereum’s price is now facing an uphill task of reclaiming the $3,000 level.
The Bollinger Bands on the daily chart show that $ETH has experienced significant volatility, with the price recently dropping from over $3,100 to just above $2,400. This sharp decline indicates increased selling pressure, and although the current rebound is encouraging, it might not be strong enough to push $ETH back above $3,000 in the short term.
The Balance of Power (BoP) indicator is currently at 0.26, suggesting that sellers still hold the upper hand. This indicator needs to show a stronger positive value for bulls to gain confidence. Additionally, the resistance level at $2,534.17, which aligns with the upper boundary of the recent downtrend channel, must be convincingly breached for any sustainable upward momentum.
In conclusion, while Ethereum’s recent rebound provides a glimmer of hope, the road to reclaiming the $3,000 mark remains challenging. Bulls need to overcome several resistance levels and shift the market’s balance of power to re-establish a strong uptrend.