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.
Ethereum Price Action ETHUSD | TradingView
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.
JumpCrypto Moves Ethereum ETH Worth $279M into Exchanges
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.
Ethereum Price Forecast | TradingView
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.
