Reasons for Ethereum's decline?

One of the main reasons for Ethereum's recent sharp price decline is the excessive long positions in the perpetual futures market. These excessive long positions may have led to sharp price fluctuations, especially when the market faces adjustments.

Another important factor is the actual or expected selling by a few large holders. These holders include market makers Jump Crypto, venture capitalists Paradigm, and crypto protocols such as Golem Network, which own a large amount of Ethereum assets. Their selling actions or expected selling behaviors have put pressure on the market, further dragging down Ethereum's performance.

In addition, the decline in the number of active validators and the increase in Ethereum's staking reward rate also reflect changes in the relatively sticky token supply. This change may have affected market sentiment and led to a weakening of investor confidence in Ethereum.

Investors need to remain vigilant in the face of these market dynamics, pay attention to market trends and the actions of large holders, and formulate appropriate investment strategies.

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