Ethereum (ETH) took a bit of a tumble, dropping 6.1% in the last day. It fell below $4,300 after failing to break through the important $4,500 resistance level.
Institutional Buying Doesn’t Stop the Slide
Interestingly, this happened even though a big institutional investor, BitMine (led by Tom Lee), bought around $84 million worth of ETH in a single day! This boosted their holdings to over 2.15 million coins. Despite this hefty purchase, the market is still acting bearish, with many short-term traders selling off their ETH.
The Fed Rate Cut Didn’t Help
Ethereum briefly jumped above $4,600 after the Federal Reserve cut interest rates. But that rally was short-lived. Selling pressure increased as big holders cashed in profits, similar to what we saw back in 2021. Data also shows ETH moving from staking to exchanges, suggesting some whales are getting cautious. Low network fees add to the bearish feeling.
Technical Analysis: Heading Towards $4,000?
Technically, things look pretty negative for ETH. It broke below key moving averages, and the chart shows a strong bearish signal. The RSI is also in oversold territory, meaning it could go even lower. Analysts see potential drops to $4,242, $4,159, and possibly even $4,065. A retest of the $4,395-$4,502 range is likely, but failing to regain this area could send ETH towards $4,000. To turn things around, bulls need to push ETH decisively above $4,502. Until then, it’s probably best to view any rallies as opportunities to sell.
Long-Term Outlook Remains Positive (Maybe)
Despite the current downturn, the big institutional purchases suggest long-term confidence in Ethereum. BitMine’s big buy shows that some investors still believe in ETH’s future, even with the short-term volatility. The overall crypto market is a bit shaky right now, with Bitcoin and other major coins also falling. The coming week could be crucial, with important economic news and a speech by the Fed Chair potentially impacting Ethereum’s price.
The Bottom Line
For now, it’s a tough situation for Ethereum bulls. Unless $4,500 is reclaimed, the price is likely to head towards $4,000.
