Why is Ethereum (ETH) Price Down Today?

Key Takeaways:

• Ethereum’s price dropped after the token failed to hold above $3,500
• ETH is facing bearish cues due to liquidation, selling pressure, and declining holdings
• The ETF hype failed to stop ETH’s downtrend

NOIDA (CoinChapter.com)— Ethereum price dropped below $3,200 after the token dropped more than 10% since June 24 to reach a daily low near $3,130. The drop in ETH prices suggests that the hype around the Ethereum ETFs seems to be dying down, which could be why the Ethereum price is down today.

Bearish Signals in Ethereum Metrics

In July, Ethereum continues to face significant bearish conditions. Futures open interest remained relatively low, hovering around $11 billion, indicating sustained liquidation or closing of positions.

Concurrently, exchange netflow volume displayed persistent volatility with notable negative spikes, showing more ETH leaving exchanges than entering. It seems that Ethereum ETF hype has failed to check the ongoing selling pressure and strategic withdrawals by investors, contributing to a bearish sentiment in the Ethereum market.

Address holdings provide additional insights. Data reveals that addresses holding 100 to 1,000 ETH reduced their positions from 9.96 million ETH in January to around 9.48 million ETH by July. This trend indicates smaller holders’ decreasing confidence.

Addresses with 1,000 to 10,000 ETH and those holding 10,000 to 100,000 ETH also exhibit a downward trajectory. Moreover, the large address holdings dropped to around 12.15 million ETH by July.

The widespread reduction in holdings across different address sizes points to broader distribution and potential selling activity.

These metrics collectively highlight a trend of distribution and liquidation. The rise and subsequent fall in futures open interest, combined with negative net flows and declining address holdings, suggest a pronounced bearish sentiment in the Ethereum market.

Additionally, the supply in loss saw increases in July, while the supply in profit experienced declines.

Technical Setup Could Be Why Ethereum Price Is Down Today

Moreover, the ETH USD pair is facing bearish cues from a bearish technical setup called the ‘descending triangle pattern.’

Market analysts often consider the descending triangle a bearish continuation signal.

The configuration features a downward-sloping upper trendline, which gradually reduces the price action’s highs, and a flat lower trendline, which is a consistent support level the price finds difficult to break.

Moreover, the pattern suggests that selling pressure is intensifying, leading to successively weaker rallies. In this setup, the potential price target is typically gauged by the maximum height of the triangle at its widest point.

The pattern’s descending trendline rebuffed the ETH USD upside attempt, reinforcing the bearish pressure against the token. However, confirming the bearish setup might result in the ETH price dropping nearly 37% to reach the projected price target near $2,010.

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