Ethereum (ETH) has been on a bit of a rollercoaster lately. Let’s break down what’s happening.
Retail Investors Sell, Institutions Buy
The price recently dipped below $4,000, a psychologically important level. Data from Binance shows that many retail traders were selling around this point. This negative sentiment has been building since early November.
However, there’s a counter-force at play: institutional investors. The demand for Ethereum Exchange-Traded Funds (ETFs) has exploded, showing a significant increase in institutional interest. This institutional buying is helping to offset the selling pressure from retail traders.
Price Drop and Market Impact
Ethereum’s price has dropped considerably, reaching as low as $3,616. This represents a nearly 6% drop in a single day, wiping out over $40 billion from its market cap. Despite this price drop, daily trading volume has actually increased, going from under $60 billion to over $72 billion. This suggests a lot of selling activity is driving the increased volume.
Liquidations have also been significant, with over $1.5 billion in total liquidations in the last 24 hours, including roughly $234 million in ETH. Long positions (bets that the price would go up) were hit the hardest.
The Outlook: Still Optimistic?
Even with the recent price drop and liquidations, some analysts remain optimistic about Ethereum’s long-term prospects. They view the current correction as a healthy adjustment, setting the stage for future growth. The increased institutional investment is a positive sign.
