Ethereum experienced a sharp decline in price, dropping to a 25-day low of $3,428 on June 13, 2024, amidst high volatility following the announcement of a pause in US Fed rates. On-chain data signals potential further declines in the future.
Ethereum Price Dips Below $3,500 for the First Time Since ETF Approvals
The cryptocurrency market has been in a period of consolidation for the past month. During this time, ETH had been performing better than the market average, driven by positive momentum from the approval of ETFs by the US SEC in late May.
However, three weeks after the approval, the fund sponsors are still finalizing filings before the official listing of the Ethereum ETFs in the market.
After another week of little progress and no clear listing date in sight, investors are growing restless. This led to a significant drop in price on June 14, following the US Fed’s announcement of a hawkish rate pause, dashing hopes of a cut in the first half of 2024 as anticipated by many optimistic analysts.
The ETH price fell by 9.71% within the weekly timeframe, erasing most of the gains made after the ETF approval. The chart shows ETH dropping to $3,362 on June 14, before bouncing back to around $3,550 at the time of writing on June 15.
Notably, the last time ETH traded below $3,400 was on May 21, prior to the rally sparked by the de-facto ETH ETF approval news. The delays in the official launch of the ETFs have negatively impacted Ethereum demand this week, increasing the risk of further price declines.
Selling Pressure from Long-term ETH Holders Rises by 10%
It is evident that recent demand for Ethereum in the market has decreased as bullish investors have grown weary during the 3-week wait for the official launch of the ETH ETF.
However, analyzing on-chain data indicates that market volatility may not be over yet.
Santiment’s Mean Coin Age data tracks the average number of days that all ETH coins in circulation have remained in their current addresses. A decrease in Mean Coin Age suggests that a large number of long-term holders are actively selling their coins, and vice versa.
The chart shows a rapid decline in ETH Mean Coin Age (365d) since May 29, coinciding with the delays in the launch of the Ethereum ETFs after the SEC verdict on May 24. Between May 29 and June 15, Ethereum’s mean coin age dropped by 10% from 172.23 to an average of 164 days held.
This significant decrease in a short period indicates a growing trend of selling among long-term Ethereum investors who previously held onto their coins for a year or more. This suggests that they have been selling their coins quietly, taking advantage of the price surge following the ETF approval.
With a substantial amount of previously locked-up coins now back in circulation, ETH price is likely to see more volatility in the coming days.
Disclaimer: This article is for informational purposes only and should not be considered financial advice. The opinions expressed are the author’s own and do not reflect the views of The Crypto Basic. Readers are advised to conduct thorough research before making any investment decisions. The Crypto Basic is not liable for any financial losses.