Ethereum’s (ETH) price has been on a downward trajectory due to significant investor activities. These actions have driven the altcoin’s price lower than the expectations of optimistic retail investors. The recent price dip is attributed to the broader market downturn and the uncertainty surrounding the introduction of spot ETH ETFs, mirroring the decline observed after spot Bitcoin ETFs were introduced earlier this year.
Why Are Medium and Long-term Investors Selling?
The behavior of medium and long-term investors, who are selling their ETH holdings for profit, has contributed to the price decline. This group typically plays a stabilizing role in the market regardless of its direction. However, their selling actions can impede even the most promising upward trends. Over the past week, approximately 740,000 ETH worth $2.4 billion have been sold, exacerbating the price drop.
How Do Sales Impact the Market Sentiment?
While these large-scale sales significantly impact the overall price, their effect on individual investors seems minimal. The Net Unrealized Profit/Loss (NUPL) indicator suggests that individual investors remain optimistic about future price increases. Despite the current downturn, there is an expectation among ETH investors for a price rise in the coming days.
Key Observations
– The ETH price is above the critical support level of 23.6% Fibonacci retracement, which may prevent a bear market.
– ETH struggles to break the 38.2% Fibonacci line at $3,304; surpassing this could lead to a rise above $3,455.
– Continued price declines might see ETH fall below $3,118.
Despite the current bearish trend, Ethereum’s price remains resilient above critical support levels, providing some hope for investors. However, continued caution is advised as market dynamics can shift rapidly.