Ethereum’s price has fallen by about 2% in the past 24 hours, trading at around $2,394 as of October 10, following a broader cryptocurrency market decline. This drop, seen during mid-London trading, mirrors the recent dip in Bitcoin’s price to $61,000. Ethereum, a key altcoin with a fully diluted market capitalisation of approximately $288 billion, has faced increased market pressure over the past three months. Several indicators suggest a potential reversal pattern may be forming, but immediate challenges persist.
China's Planned Sale of Seized Ether Intensifies Selling Pressure on Ethereum
Ethereum is currently facing heightened selling pressures, with one of the key contributors being the Chinese government. The government is reportedly preparing to offload 542,000 Ether, which were seized in connection with the Plustoken Ponzi scheme. This large-scale sell-off is expected to introduce volatility to Ethereum’s market.
On-chain data reveals that 15,700 Ether have already been moved to a new wallet address, likely in preparation for sale. Additionally, 7,000 Ether have been deposited onto cryptocurrency exchanges, presumably to be sold. Analysts predict that more of these coins will be sold in the near future, further intensifying selling pressure on the market.
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Low Institutional Demand and Recent Sales Weigh on Ethereum's Market Performance
Aside from the Chinese government’s sell-off, Ethereum has been grappling with low institutional demand. This lack of interest from large-scale investors is weighing on the network, especially as it competes with other blockchain technologies and digital assets.
Adding to the downward pressure, the Ethereum Foundation has also sold significant amounts of Ether in recent months. Meanwhile, U.S.-approved Ether exchange-traded funds (ETFs) have seen net cash outflows of more than $561 million, indicating that institutional investors are not currently bullish on Ethereum’s prospects.
Technical Indicators Suggest Potential Rebound for Ethereum Amidst Bearish Sentiment
Despite the current bearish sentiment, some analysts are pointing to technical signals that suggest Ethereum may be primed for a rebound. The price charts reveal a symmetrical triangle pattern, a structure that often precedes a bullish breakout. Additionally, a potential inverted head-and-shoulders pattern is forming, which is another indicator that could signal a price reversal.
These technical formations are reinforced by bullish divergence on the Relative Strength Index (RSI), further suggesting that Ethereum’s price could rise in the coming months. With over 28% of Ethereum’s circulating supply now locked up for staking as part of the network’s transition to a proof-of-stake model, there is strong support for a price recovery.
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Ethereum Faces Market Vulnerabilities Despite Potential for Price Stabilisation and Recovery
Looking ahead, Ethereum’s price is expected to stabilise and possibly rise before the end of the year. However, the recent sell-offs by both the Chinese government and institutional investors highlight vulnerabilities in the market. Ethereum, like many other digital assets, is heavily influenced by market sentiment and external factors such as government actions and institutional involvement.
The Ethereum network’s ongoing transformation and the rise in staked Ether could provide a cushion for the asset’s price, but significant obstacles remain. The sell-off from the Chinese government, combined with weak demand from institutional investors, raises concerns about Ethereum’s ability to maintain its dominance in the long term. While short-term technicals point to a possible recovery, the broader outlook remains uncertain.
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