Ethereum veered close to Monday’s low as it nosedived a few hours ago. It opened Thursday at $3,494 but dipped as it came under intense selling pressure, causing a dip to $3,301.
Although the largest altcoin is currently down almost 5%, its price appears stable at the time of writing. It found support close to the 50% Fibonacci retracement level and showed slight signs of recovery.
Why Ethereum Dipped
Onchain data from CryptoQuant shows a small increase in exchange Ethereum reserves. Although insignificant, it marks its first increase in the last three days. Nonetheless, it explains the reason for the ongoing price declines.
Further data reveals that traders are slightly more bearish than the previous intraday session. The Coinbase Premium is negative as US investors have not resumed aggressive buying. It shows a weaker buying pressure compared to Wednesday’s. This is also the same reading on the Korea Premium, as Asian traders are more bearish.
The bulls registered massive losses in the derivative market. Long positions accounted for almost 90% of the total liquidations over the last 24 hours. Open interest plummets due to less fascination with the market.
Exchange Netflow Total is bearish as investors dump more assets from cold storage into trading platforms. They doubled the transfer volume, indicating higher selling pressure.
Data from DefiLlama shows no significant changes to some onchain values. However, the total locked value on Ethereum slightly decreased over the last 24 hours, and the same trend is present in the number of transactions during this period.
The net inflow into the ecosystem shows a slight change in market psychology. Investors pulled assets from the project, mountain to over 384 million ETH in outflows on Dec. 23. Many viewed the move as a no-confidence vote. However, outflows slowed to barely 100 million coin on Dec. 26, indicating less selling.
Some Remain Optimistic
Some investors remain optimistic amidst the declines. They continue to accumulate as exchange reserves have dropped by 0.7% over the last seven days. The derivatives became more active during the previous 24 hours as trading volume increased by 21% in the last 24 hours.
The one-day chart shows the ETH/USD approaching a critical level. Current price levels show the asset veering closer to testing the bollinger lower band. The last time such happened, ETH promptly rebounded. The apex altcoin printed a 4% green candle after Sunday’s descent, gaining almost 7% in three days.
The lower SMA is below $3,200, indicating a possible decline to this mark. Nonetheless, an almost inevitable surge will follow.
Nonetheless, it is worth noting that ETH trades close to a critical level. It is trading close to the 50% Fib level, which many consider a tough barrier due to the demand concentration around it. The $3,250 mark is also the pivot point.
Ethereum tokens like ETC and ENS are experiencing massive selloffs. ETH Classic lost its pivot point during the previous intraday session. A few hours ago, it dipped lower, hitting a low of $25.4. Previous price movements suggest that it may lose the $25 support before rebounding.
ENS is one of the worst-hit tokens in the ecosystem, losing over 7%. Fears of further declines hit new level indicators point to a possible retest of the $31 barrier.
