Ethereum's native token, Ether (ETH), dropped 4.24% to around $3,280 on July 3, marking its worst daily performance in three weeks. In doing so, the cryptocurrency has declined by approximately 18% from its local high of around $39,750, established over a month ago.
The primary factors contributing to Ether's downturn include fears about a massive Bitcoin market dump and its consequences for the broader crypto market, as well as evidence about declining institutional interest.
Bitcoin FUD spreads across crypto market
Today's losses in the Ether market are part of a broader downtrend across the cryptocurrency market, driven by concerns over a potential large-scale Bitcoin sell-off.
Notably, the crypto market decline is linked to the anticipated start of Mt. Gox creditor repayments, expected to begin in early July. he latest evidence shows that the creditors have begun transferring the owed coins.
For instance, the Bitcoin transfer volume chart, shared by Charles Edwards, founder of hedge fund Capriole Investments, notes that tokens that were last moved seven to ten years ago were changing addresses again as of July 2.
Over $9.4 billion worth of Bitcoin is owed to approximately 127,000 Mt. Gox creditors, who have been waiting over a decade to recover their funds. As these investors receive their Bitcoin, many may choose to cash out, potentially impacting the market.
In result, Bitcoin's price dropped 4.25% intraday to below $60,000 on July 3 with ETH price and the rest of the market tailing these losses.
Ethereum funds witness biggest outflows
Today's Ether market declines follow a report from research firm CoinShares, which revealed that Ethereum funds experienced their largest weekly outflows in nearly two years.
CoinShares researcher James Butterfill wrote:
"Ethereum saw the largest outflows since August 2022, totalling US$61 million, bringing the last two weeks of outflows to US$119 million, making it the worst performing asset year-to-date in terms of net flows."
The outflows occurred in the week that VanEck and 21Shares filed applications for Spot Solana (SOL) exchange-traded funds with the United States Securities and Exchange Commission (SEC).
Solana-based investment funds witnessed $1.6 million in inflows in the same period, hinting at increased investment interest in Ethereum's top layer-1 blockchain rival.
ETH pric technical pullback
Today's Ether losses are part of a pullback trend that started after the price tested a resistance confluence comprising its 200-4H exponential moving average (200-4H EMA; the blue wave) and the upper trendline of its prevailing descending channel pattern.
As of July 3, ETH's price was testing the channel's lower trendline as support for a potential rebound move, a scenario furthered by June's resistance level at around $3,260.
Related: Ethereum will outperform Bitcoin after ETF launch — K33 Research
In the event of a sharp rebound, the cryptocurrency's likelihood of reaching its 50-4H EMA (the red wave) at around $3,413 in July is high. A decisive close above the 50-4H EMA could push the price toward the upper trendline at around $3,475.
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