Ethereum Long-Term Investors in Trouble: Will ETH Continue to Fall in Q4?
Ethereum traders fall into the trap of buying when the market is falling.
Ethereum Shows Strength in Revenue and TVL Dominance.
Ethereum [ETH] continues to play an important role in the Cryptocurrency market. As we enter the final quarter of the year, many key factors are expected to influence its price movements.
As September progressed, retail traders increased their exposure to Ethereum, trying to capitalize on the price drop. However, this resulted in many taking on losing positions as ETH continued to decline.
With similar patterns emerging again, traders are wary of the possibility of ETH continuing to decline in the final months of the year.
Source: Hyblock Capital
ETH Price Action Indicates Downtrend
Looking at Ethereum’s recent price action, it seems that the ETH/USD pair may continue to decline. On the daily chart, ETH is trading below the 150, 50, and 20 exponential moving averages, signaling a bearish trend.
This is further reinforced by the S&P 500 (SPX), which also fell below the 150 EMA, adding weight to the bearish outlook.
See also: Chainlink Partners with Fireblocks to Launch Regulatory Compliant Stablecoin
Additionally, volume bars show that sellers remain in control, reinforcing the notion that ETH could continue to disappoint traders with bearish momentum.
Source: TradingView
Impact of ICOs and Grayscale on ETH
On-chain data is adding to the negative sentiment, especially around initial coin offerings (ICOs) and Grayscale’s activity. A major investor in the recent Ethereum ICO sold 19,000 ETH, worth approximately $47.54 million.
This investor initially received 150,000 ETH during the ICO with a purchase price of $46,500, now worth $358 million.
The fact that Ethereum whales from the early stages are selling off their holdings has added further downward pressure on the price, especially given that ETH has been trending down throughout Q4 after a previous September surge in past years.
Source: Lookonchain
Additionally, two inactive Grayscale ETF wallets sent 5,837 ETH, worth $14.17 million, to Coinbase according to information from Onchain Lens.
These wallets previously held 23,026 ETH, purchased for an average of $1,593 a year ago.
See also: Ethereum forms descending wedge pattern
The movement of these investments, coupled with the wallet still holding 17,189 ETH, suggests that large investors are making moves that could impact the price of ETH.
Psychology of traders
Both retail traders and large investors appear to share a negative sentiment towards Ethereum prices. This shift comes after recent geopolitical events have caused a decline in the broader Cryptocurrency market.
As a result, ETH is expected to come under further selling pressure, which could lead to further price declines in the fourth quarter.
Source: Market Prophit
Ethereum's Revenue Power and TVL Dominance
Despite the negative outlook, Ethereum has shown resilience in other areas. The platform has generated over $140 million in gross profit across nine different chains over the past 12 months.
As an economic network with ETH as the currency, Ethereum remains a “promising land,” which could eventually reverse the negative trend.
See also: Ethereum fractal points to $3.3K, golden time for ETH price
Furthermore, Ethereum continues to dominate in total value locked (TVL) compared to other layer-one blockchains. Its market capitalization of $48.7 billion far exceeds competitors like Solana ($5.4 billion) and Sui ($984 million).
Source: X
The strength in TVL dominance shows that ETH is still leading the market, despite negative signals and challenges from emerging blockchains.
While Ethereum faces negative sentiment in the short term, its solid fundamentals and strong market position could help it recover in the long term.
However, traders should remain cautious as market dynamics continue to fluctuate.
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