Weekend, ethereumThe second-largest digital asset, took a hit when its price dropped significantly, triggering a broader negative sentiment around the crypto asset and the factors that could be responsible for the drop. Elaborating further on the matter, popular cryptocurrency analyst and trader Michael Van De Poppe has offered insight into eth’s recent price action, attributing it to Capitulation.
ethereum Price Drop Due to Capitulation
Well-known market expert Michael Van De Poppe, x.com/CryptoMichNL/status/1820181978311712907″ target=”_blank” rel=”noopener nofollow”>provided His thoughts on ethereum with the cryptocurrency community on the x platform (formerly twitter). His perspective points to the significant selling pressure and panic among traders, which have played a role in the collapse of eth.
According to Van De Poppe, since the listing of ethereum exchange-traded funds (ETFs), eth has shown notable weakness in the previous weeks, falling to a new low for the first time in six months, thus reflecting bitcoinmovement of
Van De Poppe believes that massive outflows from Grayscale’s ETHE Trust following the launch of the eth spot ETFs have negatively impacted the products, leading to weakness in eth. On the first day of trading, Poppe noted that Grayscale witnessed an outflow of over $400 million, but as of last Friday, that amount had been reduced to around $60 million.
Furthermore, it points to Jump Trading’s mass liquidation strategy, as the company was cited for dumping over $500 million worth of ethereum less than 2 days after the spot eth ETFs were listed, and they have continued to do so throughout the weekend.
Although Van De Poppe considers these factors to be the main reasons EthnicityGiven the country's recent weakness, he believes that events are occurring because of the capitulation of the past two weeks, which has probably come to an end.
Van De Poppe called the recent significant drop a capitulation, as it is often used to describe such a severe correction where double-digit losses occur in a short period of time. Furthermore, the analyst stated that he would prefer to see such a significant correction because it suggests that the downtrend is almost over.
Economic crisis drives cryptoassets downturn
As ethereum continues to fall, Van De Poppe has pointed out several negative developments around the world that may have accelerated the decline in the previous weeks. The first trigger underlined by the analyst is the defeat of former US President Donald Trump in the battle for the presidential post with Vice President Kamala Harrisas Harris begins to gain more votes in the polls.
The second event highlighted by Van De Poppe is the ongoing war between Israel and Gaza, which has escalated due to the deaths of Hamas'leader in Iran.
Other triggers include the multiple stabbings taking place in the UK, growing demand for rate cuts in the wake of dire economic data on the labour market released on Friday and the fact that Japan is experiencing its worst day on the stock market since Black Monday in 1987.
Featured image from iStock, chart from Tradingview.com
