Ethereum Prices Potentially Plunging to $3.2K, Indicated by Three Key Factors
In the cryptocurrency market, Ethereum (ETH) has seen a dip in its price, trading below the $3,550 level, a support it has maintained since July 18th. This move comes amidst a range of factors that suggest potential bearish pressure in the short term.
Arthur Hayes, co-founder of BitMEX, has sold 2,373 ETH worth $8.32 million and 7.76 million Ethena (ENA) worth $4.62 million, raising questions about the bullish conviction of large ENA holders. Additionally, on August 1st, 200,573 Ethereum flowed into exchanges, a potential sign of selling.
The market structure suggests Ethereum has fallen below the range low at $3,550. The 50-period Moving Average has served as a dynamic support in recent hours, and its failure would make the bearish case stronger. A move to $3.2k or even $3k is possible due to Ethereum’s descent below the short-term support. At press time, the 12-hour timeframe's Awesome Oscillator dipped below zero, further indicating bearish sentiment.
However, the overall market and fundamental factors weigh more positive. Ethereum’s network now underpins over 60% of tokenized real-world assets, and about 30% of ETH supply is staked and locked, lowering available supply and supporting prices. Institutional activity and new financial products on Ethereum also underpin demand. These dynamics could limit extended bearish dips and pave the way for a move back above $4,000.
In fact, some medium-term forecasts target $6,000 to $15,000 by year-end. The Relative Strength Index (RSI) at 43.73 indicates bearish divergence, signaling weakening momentum, while exchange netflows reveal heavy outflows, suggesting selling pressure. However, the support zone around $3,360 and possible rebounds toward or above $4,000 are generally expected by short-term technical forecasts.
It's important to note that the dropping Open Interest (OI) and the continuing price decline indicate a dominant bearish sentiment. However, a breakdown below $3,360 would likely be needed to confirm a move to the $3,000 range.
This information was sourced from CryptoQuant and ETH/USDT on TradingView. While the short-term outlook may be bearish, the underlying medium- and long-term outlook remains bullish due to increased institutional adoption and staking reducing circulating supply.
- Large holders of Ethena (ENA), such as co-founder of BitMEX Arthur Hayes, are selling their Ethereum (ETH) and Ethena, potentially signaling a lack of bullish conviction.
- The cryptocurrency exchange inflows of Ethereum have recently increased, with 200,573 ETH entering exchanges on August 1st, which could be a sign of selling pressure.
- Despite the short-term bearish pressure, Ethereum is still supported by factors like its dominance in the tokenized real-world asset market, staked ETH supply, and institutional activity, which could help push prices back above $4,000.
- Medium-term forecasts predict Ethereum's price could reach $6,000 to $15,000 by the end of the year, but a breakdown below $3,360 might be needed to confirm a more extended bearish dip in line with the short-term technical forecasts.
