ETH Rejected At $4,000 Resistance Again: What Next?

After yesterday's crypto market crash, Ethereum (ETH) has been rejected at $4,000 three times since March 2024. The second-largest cryptocurrency by market value is down 6.7% in 24 hours to $3,400.

Ethereum's Poor Price Performance: Why?

ETH has gained 47% YTD, although Bitcoin (BTC), Solana (SOL), and XRP have had far bigger gains. Ethereum's price momentum is hampered by many causes.

Ethereum has less brand awareness than Bitcoin, which contributes. This was seen by the weak reaction to spot ETH ETFs in August. ETH prices did not change once these ETFs were introduced.

Data shows a large investor interest gap between the two assets. U.S. spot ETH ETFs have $11.98 billion in net assets. Spot BTC ETFs possess $109.66 billion—nearly ten times more.

Over $60 million was pulled from spot ETH ETFs yesterday, the greatest outflow since November 19. Crypto expert Ali Martinez said that ETH social sentiment has dropped to its lowest level in a year. Historical tendencies suggest this might be a positive chance for Ethereum.

The aggregated futures premium for ETH fell for the first time since November 6, indicating bearishness among traders. The market decline caused Ethereum's greatest liquidation event since December 9, with $299 million in one day. Large liquidations frequently cause price instability and cascading sell-offs.

Ethereum supply issuance is questioned. According to Binance Research, ETH's high issuance rate casts doubt on its “ultrasound money” narrative, which claims it is a deflationary asset.

Their study suggests ETH might fall below $2,800 before reaching a new ATH.

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