Ethereum News: The Price of Ethereum Falls Below $1,500. Three Main Causes of the Decline
Ethereum (ETH) has continued to lag behind the broader crypto market, with its price slipping below the important $1,500 support level. The second-largest cryptocurrency may be about to undergo a more significant drop, according to technical signs, weak ETF demand, and declining network activity.
1. Ethereum Falls Below Realized Price — A Bearish On-Chain Signal
The price of Ethereum has dropped below its realized price, which is an on-chain indicator of the average price at which ETH coins were last exchanged. Since it indicates that the majority of holdings are now underwater, trading below this level historically denotes times of investor capitulation.
The Kriptolik, a CryptoQuant analyst, claims that huge sell-offs frequently occur when ETH trades below its realized price. This occurred in June 2022, which caused a 51% decline following the collapse of Terra Luna, and again in November 2022, just before ETH fell 35% after FTX’s bankruptcy. Similar bearish momentum building may be seen in the current scenario.
2. Weak Spot Ethereum ETF Flows Reflect Fading Institutional Interest
Declining interest in spot Ethereum ETFs is another factor harming investor sentiment toward Ethereum. In addition to the $94.1 million taken out of Ethereum-focused funds over the previous two weeks, data from April 8 indicates net outflows of $3.3 million.
The week ending April 4 saw $37.4 million in withdrawals from Ethereum investment products, according to CoinShares. The previous euphoria surrounding a possible SEC approval of Ether ETFs, which contributed to price increases in mid-2024, has significantly reversed with this decline.
3. Low Open Interest and Network Activity Compound the Sell-Off
There are indications of fatigue in Ethereum’s derivatives market. From its top of $32.3 billion in January, open interest in ETH futures has decreased 48% to $16.7 billion. Negative financing rates, on the other hand, imply that short positions are predominating and that pessimistic sentiment is prevalent throughout exchanges.
In the meantime, competing Layer-1 blockchains like Solana, Tron, and BNB Chain are gaining market share from Ethereum. In the last 30 days:
The number of Ethereum unique active wallets (UAW) decreased by 33%.
The volume of transactions decreased by 40.5%.
On the other hand, Tron witnessed a 16% increase in UAW and a 23% increase in transactions.
The combination of high gas fees, lower developer activity, and shrinking user engagement is weakening Ethereum’s competitive edge in the smart contract ecosystem.
Could Ethereum Fall to $1,000?
Ethereum’s price may continue to decline due to weak ETF demand, negative on-chain signals, and dwindling network activity. In the event that present trends continue, several analysts predict a possible bottom around $1,000. A robust recovery for Ethereum is still unlikely, according to Cointelegraph, until important metrics like ETF inflows and network usage improve.
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