Crypto: Ethereum Collapses - Waiting for a Spectacular Rebound?

The price of Ethereum, the world’s second-largest cryptocurrency, has experienced a sharp decline in recent days. Experts point to a capitulation phenomenon among investors, amplified by macroeconomic factors.

A spectacular decline due to massive sell-offs

The recent plunge of Ethereum caught many investors off guard. Renowned analyst Michael Van de Poppe attributes this drop to market capitulation. This phenomenon is characterized by massive panic selling, often signaling the end of a bearish cycle.

“Since the launch of Ethereum spot ETFs, we have observed a notable weakness in ETH“, explains Van de Poppe.

According to this expert, the massive exits from Grayscale’s Trust ETHE heavily impacted the price. Indeed, over 400 million dollars were withdrawn on the first day of ETF trading, a figure that stabilized around 60 million by the end of the week.

The strategy by Jump Trading also played a crucial role. The company is said to have liquidated more than 500 million dollars worth of Ethereum in just two days after the launch of spot ETFs. These significant sales increased the bearish pressure on ETH’s price.

Van De Poppe believes that “this severe correction suggests that the bearish trend is coming to an end“.

An unfavorable macroeconomic context for the entire crypto market

The fall of Ethereum occurs in a tense economic and geopolitical climate. Van de Poppe highlights several aggravating factors:

• Political uncertainty in the United States, with a potential rise of Kamala Harris in the presidential polls.
• The escalation of the Israeli-Palestinian conflict, marked by the death of a Hamas leader in Iran.
• Disappointing economic data, particularly in the U.S. labor market, fueling speculation about future rate cuts.
• A black day for the Japanese stock market, reminiscent of the 1987 crash.

Despite this bleak picture, Van de Poppe sees this capitulation as a potentially positive sign. “I prefer to see such a brutal correction because it suggests that the bearish trend is coming to an end“, he says.

This phase of capitulation could therefore mark a bottom point, paving the way for a technical rebound of Ethereum in the coming weeks.