Ethereum (ETH) has struggled with low demand from institutional investors recently, leading to continued bearish sentiment last week. The top altcoin ended the week at around $2,294, its lowest close since early February. However, this downward trend might soon slow down as Ethereum approaches its August 5 lows again.
The upcoming U.S. general elections are expected to bring economic shifts that might increase liquidity in the crypto market in the coming months. Additionally, Bitcoin’s dominance is nearing a significant change, which could speed up the movement of funds from Bitcoin to altcoins like Ethereum.
Here’s everything you need to know.
On-chain data from Glassnode shows that Ethereum whales cut back their buying in early July and have been taking profits since then.
For example, U.S.-based spot Ether ETFs have only had one week of net inflows since their approval in July. Overall, these ETFs, led by Grayscale’s ETHE, have experienced net outflows totaling about $568 million.
More Ethereum whales are increasing their selling activity, even at a loss, according to on-chain data. This added selling pressure has contributed to the bearish sentiment in the market.
Despite the current bearish trend, Ethereum’s ecosystem has shown notable growth. Sentiments data indicates that the network recently hit a four-month high in growth, which could signal a potential bullish rebound. Over 126,000 new Ethereum wallets were created just this past Sunday.
Ethereum’s network benefits from its rollups, which help onboard new users, particularly in areas like gaming and real-world asset tokenization.
Technically, Ether’s price is likely to test the support level around $2,163 again soon before trying to move towards its all-time high. However, if the price consistently closes below this support trendline, the bearish sentiment could continue, possibly pushing the price below $2,000 in the coming months.
Read Also: Bitcoin Spot ETFs Witnessed $1.2 B Massive Outflow!
Is the Ethereum ecosystem strong enough to withstand the current market pressures? We’ll find out soon enough.
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