Ethereum’s Price Plunge Today: Why?

In recent weeks, the price of Ether (ETH) has seen a decline of 13%, dropping below the $2,400 support level. This has raised concerns among traders about the possibility of a further drop to the $2,000 level. However, when analyzing the data from on-chain and technical analysis, the outlook is not so clear.

One notable development is the breach of the key demand zone for Ether, which was previously a strong support zone for the cryptocurrency. The price of Ether dropped below this level in May 2022, resulting in a significant decline of 63%. This suggests that a major drawback may be looming.

Another metric to consider is the total value locked (TVL) in the Ethereum ecosystem. This is an important indicator of the health and demand of proof-of-stake blockchains like Ethereum. The TVL reached a 19-month high before declining sharply. This decline, along with a decrease in the number of active addresses using decentralized applications (DApps) on Ethereum, signals a potential decrease in demand for the blockchain.

Market analysts have a negative outlook for the price of Ether in the short and medium term. Technical analysis suggests that Ether is a short trade, while bearish sentiment in the market is also a cause for concern. The broader crypto market downturn and the constant selling of BTC at Coinbase could continue to impact the price of cryptocurrencies, including Ether.

However, there is hope for future price growth. The eventual increase in the use of Ethereum-based protocols and the potential introduction of a spot Ether ETF could act as catalysts for long-term price growth. These factors should be monitored closely by investors.

Overall, the current situation for Ether is uncertain. While there are some negative indicators, such as the breach of the key support level and declining TVL, there are also potential catalysts for future price growth. Investors should carefully consider these factors before making any decisions.