Why Is Ethereum Going Down and What It Means for Crypto

Ethereum's price drop can be attributed to the Merge upgrade, which was expected to increase the network's scalability and efficiency. This upgrade was highly anticipated, but its actual impact has been less than stellar.

The Merge upgrade was supposed to reduce Ethereum's energy consumption by 99.95%, but it has struggled to meet this goal, leading to a decrease in investor confidence. This has resulted in a decline in Ethereum's price.

Investors are also concerned about the ongoing bear market, which has seen many cryptocurrencies, including Ethereum, experience significant price drops. The current market conditions are not favorable for Ethereum's price recovery.

The Merge upgrade has also led to increased competition from other layer 1 blockchains, such as Solana and Polkadot, which are offering faster and more scalable solutions. This increased competition has further contributed to Ethereum's price drop.

The crypto market has had a challenging period over the past day and week, with both Bitcoin and major altcoins experiencing significant losses. Bitcoin's price briefly dipped below $94,000 on Monday.

Ethereum has seen even steeper losses, dropping nearly 16% during the same period, with its current price hovering around $3,300. This is a major concern for investors.

The total market capitalization has decreased to $3.3 trillion, marking the lowest level in nearly a month. This decline has triggered approximately $1.5 billion in liquidations across the crypto market.

The Fear and Greed Index for cryptocurrencies has moved closer to 50, indicating a neutral market sentiment. This suggests investors are currently in a wait-and-see mode, neither panicking about dramatic drops nor eagerly buying the dip.

The decline in major cryptocurrencies, including Ethereum, has negatively impacted the market. The current prices of these cryptocurrencies are $3,300 for Ethereum, $2.20 for XRP, and $0.31 for Dogecoin.

The Federal Reserve's recent monetary policy announcement has also had a significant impact on the crypto market. Despite a 0.25% rate cut, Fed Chair Powell's hawkish stance has dampened investor sentiment.

Tightening global liquidity conditions and rising bond market volatility have created unfavorable conditions for risk assets, contributing to the decline in the crypto market.

Consider reading: What Drives the Price of Cryptocurrencies

In the past 24 hours, there hasn't been a significant surge in leveraged position liquidations, with a total of $283 million in crypto leveraged positions gone.

Liquidations have been more prominent in long positions, with $191 million in long positions liquidated, compared to $92 million in short positions.

Bitcoin and Ethereum have dominated the liquidations, each seeing around $42 million in long positions liquidated.

A substantial $19–20 million in short positions for Bitcoin and Ethereum were also liquidated, indicating a significant loss for those betting on stronger gains.

Those who held long positions in Bitcoin and Ethereum have suffered the most losses, being forced to close their positions as the market moved south.

Expand your knowledge: Leveraged Ethereum Etf

Ethereum's price drop has been making headlines, and from a technical analysis perspective, it's essential to understand what's happening. Ethereum is currently testing support at the 61.8% Fibonacci retracement level, coinciding with month-old lows.

This level of support is significant, as it's reinforced by the 200-day moving average and 50% Fibonacci retracement. If this level fails to hold, we might see a decline toward the more significant support at $3,000.

However, analysts project that ETH could reach between $4,000 to $6,500 by the end of 2024, and even $32,000 by 2030. This long-term outlook is promising, but for now, the focus is on the current support levels.

Here are the key support and resistance levels for Ethereum:

Bitcoin's long-term outlook remains relatively stable, retesting local support just below $93,500, a level that has been regularly tested since late November.

This support coincides with the local peaks established on November 13, when this level marked a new record high. The psychological barrier of $90,000 lies just below, which bulls are likely to defend strongly.

Buyers should only become concerned about Bitcoin's future if the price drops below $74,000, where the 200-day exponential moving average intersects with support levels from October 29.

Dogecoin has been forming support around $0.30 for nearly a week, matching month-old lows. If this level fails to hold, we might see a decline toward the 200-day EMA near $0.22.

XRP has been maintaining local support at $2.20 since mid-November. Even if this level breaks, the psychological support at $2.00 lies just below.

The CryptoGeek XRP price prediction suggests the token could soar to almost $1,000 next year, with some enthusiasts even predicting a bull run to $973 by 2025.

A long-term rising trendline can be a game-changer for Ethereum, potentially coming to the rescue in times of turmoil.

This trendline has a significant impact on the price of ETH, acting as a potential support level.

The 50% Fibonacci retracement level is a crucial point of reference, as it implies double support for the price of ETH.

ETH dropped to this level, which is a key indicator of a potential bounce-back.

The chart of ETH shows a strong support structure, which is a promising sign for investors.

This support structure is a result of the long-term rising trendline and the 50% Fibonacci retracement level.

In times of market volatility, it's essential to pay attention to these trendlines and support levels.

Worth a look: How Long Is This Going to Take?

Ethereum, the second-largest cryptocurrency by market capitalization, has experienced a notable decline in its price over the last year.

Investors might be concerned about the factors contributing to this downturn.

Ethereum still has potential for a rebound, despite its recent price slump.

RJ Fulton, a notable investor, has positions in Ethereum, showing confidence in its long-term growth and innovation.

The ETHBTC chart is a crucial indicator for Ethereum's price movement. The long term falling trendline is providing support to the price of ETH, which is a positive sign.

This trendline is expected to slow down the accelerated decline of ETH relative to BTC. As a result, we might see a stabilization in the price of ETH.

However, for ETH to create bullish momentum, it needs to break above 0.05 in BTC terms.

Blockchain is a distributed digital ledger technology that enables secure, transparent, and tamper-proof transactions. It's the backbone of cryptocurrencies like Ethereum.

Ethereum is the second-largest cryptocurrency by market capitalization, with a notable decline in price over the last year. This decline has investors concerned about its long-term growth.

Investors should remain confident that Ethereum's long-term growth and innovation will prevail over short-term hurdles. Ethereum has the potential for a rebound, despite the current downturn.

RJ Fulton has invested in Ethereum, and The Motley Fool recommends it, showing confidence in the cryptocurrency's future.

For another approach, see: Cryptocurrency Prices Ripple

The crypto market is experiencing a significant decline, primarily due to the Federal Reserve's recent monetary policy announcement.

The Fed's 0.25% rate cut wasn't enough to boost investor sentiment, as Chair Powell's hawkish stance and indication of fewer rate cuts in 2025 dampened enthusiasm.

Tightening global liquidity conditions and rising bond market volatility have created unfavorable conditions for risk assets.

Bitcoin has fallen below $94,000, and Ethereum dropped to around $3,350.

The total market capitalization has decreased to $3.3 trillion, marking the lowest level in nearly a month.

This decline triggered approximately $1.5 billion in liquidations across the crypto market.

On a similar theme: Bitcoin Cryptocurrency Market Capitalization Decline