Ethereum (ETH), the second-largest cryptocurrency by market cap, has seen a significant drop in its price in recent days, falling to $2,000, its lowest level in 16 months.
This decline has raised questions about the reasons behind the decline.
Possible reasons behind the decline in Ethereum’s price:
Macroeconomic pressures and trade tensions: Global trade tensions, especially after the United States imposed tariffs on countries such as Canada, Mexico, and China, have increased uncertainty in financial markets.
Increased supply and increasing selling pressure: Over the past 30 days, the circulating supply of Ethereum has increased by about 66,350 coins, equivalent to more than $138 million at current market prices. This increase in supply has increased selling pressure on the currency, especially with large amounts of Ethereum being transferred to trading platforms, indicating a readiness for selling operations.
Massive Liquidations and Whale Activity: Leveraged markets have seen massive liquidations of long positions over the past 24 hours, with a total liquidation of around $861 million, of which $168 million was for Ethereum purchases.
This activity by large holders of Ethereum, known as “whales,” has increased selling pressure on the coin.
Technical Breakdowns and Bearish Indicators: Several analysts have pointed to bearish patterns on Ethereum’s charts, suggesting a potential downward trend to levels as high as $1,540 or even $1,000 if the downward momentum continues.
These analyses are based on technical patterns such as the “double top” and previous support levels.
Despite the current challenges, some analysts see current price levels as a buying opportunity for long-term investors.
