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Ether (ETH) price fell throughout the weekend, with the slump worsening on Sunday as the premier altcoin pushed on a decline that started on Friday. The native token on Ethereum gave away almost $500 between Saturday and Sunday as bulls lost hold of $1,800 support above which the token traded at for the better part of last week. Ethereum saw further losses earlier today as the sell-off intensified, pushing the ETH/USD pair to an 18-month low of $1,200.
The descent was triggered by investor reaction to the inflation data shared by the US Department of Labour on Friday. The department reported that the inflation increased by 8.6% in May relative to May 2021. The news spread fear among investors, with the majority choosing safety in the risk-off environment.
How far can Ethereum fall or bounce?
The price of Ether has declined by more than 74% in the last seven months since touching a record high in November 2021. The ETH/USD year-to-date chart shows that Ether has lost 67.30% since the turn of the year. CoinMarketCap data on the Ethereum market further indicates a 35.03% downtrend in the price of the leading altcoin over the past seven days.
The latest slump has shattered hopes for a quick recovery to the familiar $3,000 grounds in the short term. This is, however, not the only concern for ETH holders.
The weekly Relative Strength Index (RSI) shows that Ethereum is in the oversold region – having made entry into this zone yesterday for the first time in more than three-and-half years. The return to the oversold zone is an exciting development that investors should keep an eye on. This is because the last time Ether entered this zone, it emerged and embarked on a bull run gaining more than 400%.
Should this scenario play out again, analysts project that Ether (ETH) will find the first point of resistance marginally above $1,600 around its 200-week EMA. That said, there is no guarantee Ethereum will assume this trajectory in the market with a plunge towards $1,120 on the cards as well.
Several indicators in the Ethereum market point to further lows for the leading altcoin and a potential ‘trying’ time for holders. Bloomberg analysts report that Ethereum price may see further breakdown based on its technicals – a view shared by several other market strategists.
Other altcoins also see losses as total liquidations top $975 million
The losses in the crypto market are more pronounced in other altcoin markets. The native tokens of Solana and Avalanche have declined 18.51% and 19.13% in the last 24 hours, while Polygon’s MATIC has moved down 19.67%. Cardano (ADA) and Algorand (ALGO) are, on the other hand, faring comparatively better albeit equally in the red. ADA and ALGO have registered 13.09% and 9.74% drops, respectively, in this period.
Liquidations data from Coinglass shows that t $976 million worth of trader orders have been liquidated in the last 24 hours.
Bitcoin accounts for the bulk of this with $413.47 million, followed by Ethereum with $369.70 million. In the 4-hour timeframe, however, Bitcoin still has the highest liquidated volume with $121.24 million. Ethereum is second, with $74.08 million forcibly cleared.
Ethereum TVL shrinks 12.45% to $54.47 billion
The total value locked on Ethereum has continued decreasing since Friday, a reflection of the poor performance in the market. The chain’s TVL has contracted by 20.50% during this period, from $68.52 billion on June 10 to $54.47 billion at writing.
To learn more about Ethereum visit our Investing in Ethereum guide.
Sam is a financial content specialist with a keen interest in the blockchain space. He has worked with several firms and media outlets in the Finance and Cybersecurity fields.