Published on augustus 6, 2024, 12:29 am
Image source: Fox News
```json [ "TLDR: Ether (ETH) plummeted to around $2,100 due to factors like ETH transfers by Jump Trading, geopolitical tensions, and economic concerns. Analysts fear further decline below $2,000 as outflows from crypto investment funds increase. Decrease in network activity alongside reduced new addresses and transactions suggest investor caution amidst the launch of spot ETH ETFs in the US.", "ETH experienced a 30% drop, sliding from $3,016 to $2,116 on August 5th, the lowest in eight months. Market maker Jump Trading's $315 million ETH transfer to exchanges contributed to this decline." ] ```
Several factors have intensified the drop in ETH, driving it down to $2,100, and experts are cautioning that the recovery process might be lengthy.
Ether (ETH) experienced a further decline on August 5th, plunging to levels not seen in eight months just above $2,100. This downturn was attributed to ETH transfers by Jump Trading, escalating geopolitical tensions, and apprehensions regarding the global economy’s well-being, causing a correction across all markets.
Market data reveals that ETH tumbled from a peak of $3,016 on August 3rd to a low of $2,116 on August 5th—a significant drop of about 30%. The last time Ether traded around this range was on January 3rd during a period marked by anticipation around the first spot Bitcoin exchange-traded funds (ETFs) approval in the United States.
On August 5th, Ether experienced a substantial 22% decrease in its price—the most significant single-day slump since May 2021. Notably, market maker Jump Trading transferred $315 million worth of ETH tokens to exchanges as part of its strategy to unwind its crypto positions.
With Ether falling to $2,100, analysts are expressing concerns that further outflows could potentially push prices below $2,000. A report by CoinShares on August 5th indicated that crypto investment funds witnessed outflows for the first time in four weeks during the week ending August 3rd—resulting in investors withdrawing over $528 million. This significant outflow was driven by fears related to a potential global recession which led to the reduction of total ETP AuM by US$10 billion.
James Butterfill from CoinShares highlighted that negative sentiment primarily targeted Bitcoin (BTC) and Ether as both saw outflows amounting to $400 million and $146.3 million respectively. The net outflows from Ether investment products have now surpassed $430 million post the debut of US-based spot Ethereum ETFs on July 23rd.
Moreover, amid the crash in Ether’s price is a simultaneous decline in network activity observed through decreased new and active addresses. Data indicates that new addresses on the Layer-1 token dropped significantly over the last month and active addresses have decreased by 13.5%, creating concern among investors.
As daily transactions on the Ethereum network also decreased following the launch of spot ETH ETFs in the US, it signals investor preference towards gaining exposure to Ether through funds rather than direct ownership—indicating cautious market sentiment regarding cryptocurrency investments.
Original article posted by Fox News
