In recent days, the cryptocurrency market has experienced significant fluctuations, particularly following Bitcoin’s (BTC) decline to $61,000. This downturn has mirrored movements across various altcoins, including Ethereum (ETH), which saw its price dip by approximately 2% over the past 24 hours. As of Thursday, October 10, Ethereum was trading at around $2,394 during the mid-London session. This large-cap altcoin, boasting a fully diluted valuation of roughly $288 billion and an average daily trading volume of $14.2 billion, has been exhibiting a potential reversal pattern over the past three months.
Ethereum Faces Fundamental Challenges
Recent analysis highlights several fundamental challenges that Ethereum is currently facing. One notable issue involves the Plustoken scam, where a significant amount of Ether, approximately 542,000 ETH valued at $1.3 billion, was seized. In the past 24 hours, 7,000 of these coins were sent to exchanges. Historical data from 2019 and 2020 suggests that over 150,000 BTC was likely sold by entities managing the Plustoken funds.
The Ethereum market is anticipated to endure further selling pressures due to the Chinese government’s actions. The government plans to sell the remaining Ether seized from the Plustoken Ponzi scheme. On-chain data reveals that the Chinese authorities have transferred 15.7k Ether to different wallet addresses and deposited 7,000 Ether coins to crypto exchanges, potentially for sale. Experts predict that the Chinese government will likely continue to sell more Ether coins shortly.
Amidst these challenges, the Ethereum network is grappling with significant selling pressure coupled with low demand from institutional investors. In addition to the substantial sales conducted by the Ethereum Foundation, the US spot Ether ETFs have recorded a net cash outflow exceeding $561 million since their official approval.
Midterm Expectations
From a technical analysis perspective, Ethereum’s price is currently forming a potential symmetrical triangular pattern, often indicative of a bullish rebound. Moreover, on the daily timeframe, Ether’s price is shaping a possible inverted head and shoulders (H&S) pattern, accompanied by a bullish divergence on the Relative Strength Index (RSI).
With over 28% of Ether’s circulating supply already locked for staking to secure the network, Ethereum’s price is well-positioned for a potential bullish rebound before the year’s end. These technical indicators suggest that while Ethereum faces immediate challenges, there are grounds for optimism regarding its midterm performance.
As the market continues to evolve, stakeholders and investors must stay informed about these dynamics to make strategic decisions. Ethereum’s journey is marked by both challenges and opportunities, and its future will depend significantly on how these factors unfold in the coming months.
