Why did Ethereum plummet today? Is it a market trap or a correction before a rebound?
Ethereum fell nearly 4% today and is currently trading at $3,354.5. Although market sentiment remains greedy, the price trend is not satisfactory. What caused Ethereum to suffer a heavy fall? First, we noticed that the price encountered strong suppression near $3,524, and the key moving average failed to provide effective support. The "death cross" on December 23 also indicates downward pressure in the short term.
However, it is worth noting that despite the rising bearish sentiment in the market, trading activity has declined, and investors seem to be waiting and watching. In particular, the decline in Ethereum's exchange reserves indicates that a lot of funds are flowing from exchanges to cold wallets, showing investors' mid- to long-term confidence in Ethereum.
Judging from the ETF inflow data, the inflow of funds remains stable, especially Blackrock's ETHA and Fidelity's ETH products have attracted a lot of investment. This shows that although prices may continue to fluctuate in the short term, the long-term trend remains optimistic.
So, will Ethereum rise to more than $4,000? The future direction of the market is still full of uncertainty, but the short-term correction may be accumulating energy for the next breakthrough. As long as smart investors grasp the trend, there will be rich returns in the future.
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