Ethereum Price Sees Double-Digit Losses, Raising Questions About Long-Term Outlook
The price of Ethereum (ETH) has fallen sharply over the past two days, dropping 12% and erasing gains made over the previous two weeks. As of October 4th, ETH was trading at $2,373, down from nearly $2,700 just days earlier.
This sudden bearish turn has left investors and analysts questioning whether Ethereum can regain momentum and climb back above key resistance levels around $2,800. The second-largest cryptocurrency by market cap is now underperforming the broader crypto market, which has seen a 1.4% increase in total capitalization since September 1st.
Multiple Factors Contributing to Ethereum’s Decline
Several factors appear to be contributing to Ethereum’s recent struggles:
- Disappointing ETF Performance: The highly anticipated Ether ETF launched in the US in July has seen net outflows of $552 million since inception, signaling weaker-than-expected investor demand.
- Selling Pressure from Early Investors: On-chain analysis shows that some early Ethereum ICO participants have been offloading significant holdings, including one entity that sold 31,000 ETH over the past month.
- Network Upgrades Impacting Tokenomics: Recent changes aimed at reducing layer-2 costs have turned Ethereum’s issuance rate positive, contrary to expectations of it becoming deflationary.
- Complex Roadmap Concerns: Ethereum co-founder Vitalik Buterin recently proposed further technical adjustments, adding to the network’s already complex upgrade path.
Network Activity Remains Strong Despite Price Dip
Despite these headwinds, Ethereum’s network activity remains robust. The blockchain continues to lead in decentralized application (DApp) usage, with $26.2 billion in weekly trading volumes and increases in active addresses and transaction activity across major protocols like Uniswap, Balancer, and Curve.
Ethereum’s key metrics include:
- 27% increase in active addresses over the past week
- 41% rise in trading volume
- 33% increase in Uniswap trading volume
- 122% surge in Balancer volumes, reaching $5.4 billion over seven days
ETH Price Prediction: Analysts Eye Critical Support Levels
Looking ahead, analysts suggest Ethereum needs to reclaim the $2,300 support level to avoid further losses. Some market observers warn that a break below this threshold could see ETH test yearly lows around $2,150.
Carl Runefelt, a prominent analyst, shared on social media that if Ethereum fails to hold its current trendline support, a drop to $2,150 could be the next target. This potential fall would likely shake out many investors who were expecting a bullish continuation in the coming weeks.
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