Why is Ethereum (ETH) price down today?
ETH struggles at the $3,300 level. Cointelegraph explains why the price of Ethereum continues to fall.
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Collect this article as NFTEther (ETH) price is down today, dropping in excess of 9% between April 1 and April 5 to trade near the $3,300 level. Ether’s price action has mirrored Bitcoin (BTC), which slid below $70,000 on April 1, dropping 5% over the same time period.
The decline in Ether’s price can be attributed to surging liquidations in the broader crypto derivatives market, decreased volume and TVL on the Ethereum network, and Ether’s increasing supply on exchanges due to whale activity.
Futures liquidations back Ether’s correction
Ether’s price decline was followed by an uptick in liquidations in the altcoin’s derivatives market.
According to Coinglass data, over $50.7 million in Ether long positions have been liquidated in the past 24 hours, with $24.7 million wiped out in the previous 12 hours. Meanwhile, a total of $264.7 million in leveraged positions has been liquidated across the crypto market, with $185 million being long positions.
Total value locked on Ethereum on the decline
The decline in ETH price coincides with the plummeting volume on the Ethereum network. Ethereum volume has fallen 10% over the last week. The drop in network volume comes after the highly anticipated Decun upgrade went live on March 13.
Corroborating Ether’s price drop was the decline in the Ethereum network’s total value locked (TVL), which has fallen 1.5% in the last 24 hours and 5.5% on the week. The current Ether TVL of $47.9 billion is over $60 billion less than the all-time high of $106 billion, set on Nov. 13, 2021.
Ether whales offload their holdings as ETH on exchanges reduces
Large Ethereum investors have been reducing their ETH holdings in anticipation of price drops in the short term. Data from market intelligence firm Santiment shows that the percentage of wallets holding between 10 million and 100 million ETH has decreased from 30.56% on March 30 to 27% on April 5. As shown in the chart below, the percentage of those holding between 1 million and 10 million ETH has seen a sharp decline over the last seven days from 7.6% to 7%.
Ether whale dissipation is supported by increasing ETH deposits on exchanges. According to Glassnode data, the number of deposit transactions to known exchange wallets started increasing on March 26, when ETH price dropped below $3,600. The deposit to exchanges continued on April 3 when ETH slid below $3,200, increasing from 20,419 transactions to 35,887 on April 5.
Increasing transfer of Ether to exchanges suggests an intent to sell, which is generally a bearish sign.
As such, the number of large transactions transferring Ether to exchanges has increased. On April 5, blockchain tracker Whale Alert flagged several transactions transferring large amounts of Ethereum from self-custody wallets to exchanges.
One holder transferred 9,840 ETH worth $32.25 million from an unknown wallet to the Coinbase crypto exchange.
Another one deposited 22,975 ETH worth $76.5 million from an unknown wallet to Coinbase Institutional.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
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