How Did Ethereum Price Lose 9% of Its Value in Just 24 Hours?

by

In the past day, there was a significant drop of over 9% in the value of the second-largest cryptocurrency, Ethereum. This caused its price to fall back to around $3,300 – a level last seen in mid-November. The reason for this decline appears to be strong economic data from the U.S., which has dampened expectations for a Federal Reserve interest rate cut.

Ethereum Price Led $700 Million in Net Crypto Liquidation

In the past day, there was a significant sell-off across the broader cryptocurrency market and Bitcoin prices, but Ethereum (ETH) led the way in terms of liquidations. According to Coinglass data, over $152 million worth of ETH were liquidated, with most of it coming from long positions amounting to $132 million. Conversely, Bitcoin (BTC) saw around $128 million in liquidation.

In the past day, a staggering $710 million worth of cryptocurrencies have been forced to be sold off, impacting approximately 237,476 traders. The biggest liquidation occurred on Binance, where someone disposed of Ethereum valued at an impressive $17.74 million – one of the largest Ethereum liquidations ever recorded.

Whales and Institutions Offload ETH Holdings

During the past 24 hours, numerous ETH sell transactions were made by whales and institutional investors, who decided to reduce their holdings. Consequently, the price of Ethereum decreased as investors’ confidence in a future rally waned. This is because recent economic data from JOLTS job openings and ISM Services PMI indicated a robust US economy. Such strong economic indicators could lead the U.S. Federal Reserve to postpone any interest rate cuts this year.

40,000 Ether, equivalent to approximately $140.44 million, was moved from Arbitrum to Binance, as reported by Whale Alert. Simultaneously, 18,172 Ether worth around $66 million was transferred from Cumberland to Coinbase Institutional.

According to Lookonchain’s report, it was recorded that WisdomTree transferred 11,733 Ether to Coinbase, right before the cryptocurrency market experienced a crash.

Ethereum Foundation Makes First ETH Sale of 2025

In simple terms, this year, the Ethereum Foundation has carried out its initial sale of Ether (ETH), amounting to 100 ETH worth approximately $336,000. This ETH was exchanged for a total of 329,463 DAI. In 2024 alone, the foundation has sold nearly $12.96 million in Ether, which has had an impact on Ethereum’s potential price increase.

Spot Ethereum ETFs Record Outflow

On Tuesday, there was a total withdrawal of $86.8 million from Ethereum-based spot ETFs, according to data from Farside Investors. This outflow was primarily from Fidelity’s FETH, Grayscale’s ETHE, and the mini exchange-traded fund for Ethereum. The movement of funds in and out of these ETFs is often observed as a sign of an asset’s current popularity or demand among investors. This flow serves as a gauge of investor confidence in the market.

What’s Next for Ethereum Price

Currently, the value of Ethereum is being exchanged at approximately $3,329, and there’s no indication of an immediate recovery. Predictions by experts suggest that its price could reach anywhere from $5,000 to as high as $10,000 by the end of this year.

The data on Ethereum (ETH) derivative contracts indicates a decrease of 7% in open interest. Currently, the value of ETH Futures stands at 9.04 million, equating to approximately $30.33 billion. Conversely, the number of open options has risen as traders adjust their call and put positions.

Analyst IncomeSharks disclosed a swift trade opportunity on lower time frames. He advises searching for a rebound and subsequently exiting with a long position. Simultaneously, analyst Crypto Tony expressed that as long as we maintain $3200 at the daily close, he will continue to hold his long position.

Read More

2025-01-08 15:14