- Analysts caution that it may take some time for ETH to rebound after a number of reasons caused the price to dip to $2,100.
A fall in all markets was brought on by Jump Trading’s ETH transfers, growing geopolitical tensions, and worries about the state of the global economy. On August 5, Ether ETH fell to eight-month lows, with a ticker down $2,458.
According to data from TradingView and Cointelegraph Markets Pro, ETH dropped from a high of $3,016 on August 3 to a low of $2,116 on August 5, a decrease of about 30%.
When Ether last moved at this level, it was on January 3, during a surge that was sparked by excitement over the potential approval of the country’s first spot Bitcoin exchange-traded funds (ETFs).
The price of ether dropped by as much as 22% on August 5, marking the biggest one-day decrease since May 2021. It was revealed that as it gets ready to unwind its cryptocurrency positions, well-known market maker Jump Trading transferred $315 million worth of ETH tokens to exchanges.
Fears of a recession caused Ethereum investment products to lose almost $146 million.
Analysts worry that more withdrawals could push Ether’s price below $2,000 after it dipped to $2,100.
For the first time in four weeks, investors withdrew more than $528 million from cryptocurrency investment funds for the week ending August 3, according to a CoinShares report published on August 5.
A global recession was blamed by the cryptocurrency asset management company for the significant withdrawals, which “saw US$10bn wiped off total ETP AuM.”
The two biggest cryptocurrencies by market capitalization—Bitcoin BTC tickers down $55,130 and Ether, which had withdrawals of $400 million and $146.3 million, respectively—were the main targets of the negative mood.
Since US-based spot Ethereum ETFs went on sale on July 23, net outflows from Ether investment products have already totaled $430 million.
SoSo Value data shows that in the week of July 29 to August 2, there were a total of $229.77 withdrawals from spot Ether ETFs compared to $60.42 million in inflows.
The onchain activity of Ethereum declines
The number of new and active addresses indicates that network activity is declining at the same time as Ether’s price drop. The number of new addresses on the later-1 token has been declining over the past month. The biggest decrease was observed between July 27 and August 3, when wallets with 93,840 addresses reached year-to-date lows of 82,540.
On the Ethereum network, the average number of active addresses has similarly decreased by 13.5%, from 486,740 on July 5 to 421,259 on August 2.
The network’s daily transaction volume has also decreased, falling from 1.17 million on July 6 to 1.11 million on August 4.
The drop in these indicators after spot ETH ETFs were recently introduced in the US suggests that some investors would rather use the funds to get exposure to Ether than purchase and hold the token directly.
Disclaimer : This article was created for informational purposes only and should not be taken as investment advice. An asset’s past performance does not predict its future returns. Before making an investment, please conduct your own research, as digital assets like cryptocurrencies are highly risky and volatile financial instruments.
