Crypto: Why the Ethereum Rebound Might be Slower than Expected?
Ether (ETH) price recently hit its lowest level in eight months. This marked decline raises concerns about a recovery that could take longer than expected.
![Un investisseur crypto tenant le logo d'Ethereum](https://www.cointribune.com/app/uploads/2024/08/Sinapi-66-1024x683.png)
Catalysts Behind Ether’s Decline
On August 5th, ether’s price plunged to a floor of $2,100. A 22% drop marking the altcoin’s largest one-day decline since May 2021. This rapid decline is primarily attributed to various strategic and macroeconomic moves, including a notable transfer of $315 million worth of ETH by Jump Trading to exchanges.
This transaction was seen as a precursor to an imminent liquidation of their positions. Moreover, the crypto market sentiment was dampened by escalating geopolitical tensions and growing worries about a global recession. These factors led to massive corrections across financial markets, further putting pressure on ether.
Crypto Asset Recovery: A Rocky Path
ETH’s debacle has affected Ethereum investment products, leading to significant capital outflows. According to a CoinShares report dated August 5th, crypto investment funds saw their first net outflows after four weeks of inflows. Investors withdrew over $528 million during the week of August 3rd.
Meanwhile, Ethereum’s on-chain activity shows a decline. The number of active and new addresses on the blockchain decreased, according to data from The Block. Between July 27th and August 3rd, it dropped from 93,840 to 82,540. Daily transactions on the network also decreased, from 1.17 million on July 6th to 1.11 million on August 4th. This decline in metrics comes after the recent launch of Ethereum spot ETFs in the United States. This suggests that some investors prefer to gain exposure to ether through funds rather than by directly purchasing the crypto asset.
Currently, ETH is striving to break the $2,500 mark. However, the outlook for a swift price recovery of the crypto asset remains uncertain. Some analysts even foresee the asset falling to $2,000. In short, the road to recovery could be long.
Maximize your Cointribune experience with our "Read to Earn" program! For every article you read, earn points and access exclusive rewards. Sign up now and start earning benefits.
Diplômé de Sciences Po Toulouse et titulaire d'une certification consultant blockchain délivrée par Alyra, j'ai rejoint l'aventure Cointribune en 2019. Convaincu du potentiel de la blockchain pour transformer de nombreux secteurs de l'économie, j'ai pris l'engagement de sensibiliser et d'informer le grand public sur cet écosystème en constante évolution. Mon objectif est de permettre à chacun de mieux comprendre la blockchain et de saisir les opportunités qu'elle offre. Je m'efforce chaque jour de fournir une analyse objective de l'actualité, de décrypter les tendances du marché, de relayer les dernières innovations technologiques et de mettre en perspective les enjeux économiques et sociétaux de cette révolution en marche.
The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.