What’s causing Ethereum (ETH) price drop today?
Key factors contributing to the drop in Ether’s price today include rising bond yields due to weakening demand for short-term Treasury bonds and large investors’ recent reduction in Ether holdings.
Ethereum fell more than 1.66% today to $3,700. Its decline is part of a wider cryptocurrency market correction, with net capitalization falling by as much as 2.50% on the same day.
Key factors contributing to the drop in Ether’s price today include weaker demand for short-term Treasury bills leading to higher bond yields, and a continued decline in large Ether holdings.
Ether falls as US debt auctions are tepid. This week’s auction of $183 billion of 2-, 5-, and 7-year US Treasury bonds was met with weak demand, causing yields to rise sharply over the past two days. Interestingly, the period of rising bond yields coincided with a drop in the Ether market,
Rising yields on those U.S. Treasury bonds, coupled with growing expectations that the Federal Reserve may cut interest rates only once this year, have weighed on cryptocurrency markets as traders and investors seek higher returns.
Generally speaking, when the dollar strengthens and safer investments such as U.S. Treasuries offer higher yields, investors move money out of riskier assets, including cryptocurrencies, in search of more stable returns. This causes demand for ether to fall, causing its price to fall.
Ethereum whales are selling their Ethereum holdings, and the decline in Ethereum's price today is due to a sharp drop in the supply of ETH held by one of its richest groups. Notably, the supply of Ethereum held by entities with balances between 1 million and 10 million ETH (brown) has decreased by 1% in the past 24 hours. At the same time, the supply of Ethereum held by entities with balances between 100,000 and 1 million ETH has increased, indicating the absorption of Ethereum from a larger group.
The redistribution from larger to smaller groups of Ether wallets suggests that whales are selling their Ether holdings, causing the price of Ether to fall.
Ether’s drop today is part of a correction that began on May 29, when its four-hour relative strength index (RSI) reading nearly entered overbought territory above 70. An overbought RSI typically precedes a period of consolidation or correction.
Furthermore, the cryptocurrency’s pullback was preceded by a bearish divergence between its price and the RSI, with the price forming higher highs while the RSI forming lower highs. The indicator suggests that buying sentiment in the market is waning.
Meanwhile, ETH has formed a double top pattern, which is characterized by two consecutive peaks with a small pullback in between, suggesting that the cryptocurrency will see more downside in June.
The Double Top pattern is often viewed as a bearish reversal indicator. A Double Top pattern is confirmed when the price breaks below the neckline support level and can result in a decline equal to the maximum height of the pattern.
Applying this technical rule to the ETH market, the neckline support target is $3,684, and if it falls below this level, the price may fall to $3,400 in June. This level is 8.80% lower than the current price level and coincides with another support level for ETH - the 200-4H exponential moving average (200-4H EMA; blue wave).
Ethereum fell more than 1.66% today to $3,700. Its decline is part of a broader cryptocurrency market correction, with net capitalization falling as much as 2.50% on the same day. Key factors contributing to the ether price drop today include weaker demand for short-term treasuries leading to higher bond yields, and a continued decline in large ether holdings.
Ether falls on tepid US debt auctions This week’s auction of $183 billion of 2-, 5-, and 7-year Treasury notes was met with weak demand, causing yields to rise sharply over the past two days. Interestingly, the period of rising bond yields coincided with a drop in the Ether market.
Rising yields on those U.S. Treasury bonds, coupled with growing expectations that the Federal Reserve may cut interest rates only once this year, have weighed on cryptocurrency markets as traders and investors seek higher returns.
Generally speaking, when the dollar strengthens and safer investments such as U.S. Treasuries offer higher yields, investors move money out of riskier assets, including cryptocurrencies, in search of more stable returns. This causes demand for ether to fall, causing its price to fall.
Ethereum's price drop today is due to a sharp drop in the supply of ETH held by one of its richest groups. Notably, the supply of Ethereum held by entities with balances between 1 million and 10 million ETH (brown) has decreased by 1% in the past 24 hours. At the same time, the supply of Ethereum held by entities with balances between 100,000 and 1 million ETH has increased, indicating the absorption of Ethereum from a larger group.
The redistribution from larger to smaller groups of Ether wallets suggests that whales are selling their Ether holdings, causing the price of Ether to fall.
Ether’s drop today is part of a correction that began on May 29, when its four-hour relative strength index (RSI) reading nearly entered overbought territory above 70. An overbought RSI typically precedes a period of consolidation or correction.
Furthermore, the cryptocurrency’s pullback was preceded by a bearish divergence between its price and the RSI, with the price forming higher highs while the RSI forming lower highs. The indicator suggests that buying sentiment in the market is waning.
Meanwhile, ETH has formed a double top pattern, which is characterized by two consecutive peaks with a small pullback in between, suggesting that the cryptocurrency will see more downside in June.
The Double Top pattern is often viewed as a bearish reversal indicator. A Double Top pattern is confirmed when the price breaks below the neckline support level and can result in a decline equal to the maximum height of the pattern.
Applying this technical rule to the ETH market, the neckline support target is $3,684, and if it falls below this level, the price may fall to $3,400 in June. This level is 8.80% lower than the current price level and coincides with another support level for ETH - the 200-4H exponential moving average (200-4H EMA; blue wave).
Conversely, a decisive bounce off the neckline support (accompanied by rising trading volume) could invalidate the double top pattern, with ETH price eyeing early May resistance around $3,850 as the next upside target.
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