Ethereum’s Price Drops Over 53% in 2024, Erasing $255 Billion in Market Value

Ethereum has experienced a significant decline in 2024, with its price plunging by more than 53% from its yearly high. The cryptocurrency’s market capitalization has dropped from $482 billion to $227 billion, wiping out $255 billion in value. This sharp downturn has raised concerns among investors and analysts alike.

Analysts Lower Ethereum Price Target Amid Market Concerns

Market analysts have been revising their outlook for Ethereum. On Monday, financial experts at a prominent institution reduced their price target for Ethereum from $10,000 to $4,000. The adjustment was attributed to what they described as a “structural decline” in the network. This sentiment reflects growing unease about the cryptocurrency’s future trajectory.

Ethereum Investors Face Losses

The ongoing price crash has left many Ethereum investors in the red. According to recent data, only 47.6% of the total Ethereum supply is currently in profit. This is the lowest level seen since October 2023, highlighting the severity of the downturn. Additionally, the network’s realized losses have reached their worst levels in nearly two years, further underscoring the challenges faced by investors.

Key Metrics on Ethereum Supply in Profit

  • Percentage of supply in profit: 47.6%
  • Realized losses: Highest in two years

Traders Profit and Lose Amid Ethereum Volatility

While many investors are grappling with losses, some traders have capitalized on Ethereum’s price swings. Data shows that one trader made a staggering $86 million by shorting Ethereum on a popular trading platform. This individual placed a $143 million short trade on March 3, when Ethereum was trading at $3,000. By applying 25x leverage, the trader profited as Ethereum’s price plunged to $1,878 on Tuesday.

Here’s a breakdown of the short trader’s position:

  • Initial trade: $143 million short at $3,000
  • Leverage: 25x
  • Profit: $86 million
  • Funding fee: $3.13 million
  • Margin: $5.76 million
  • Liquidation price: $3,194

However, not all traders have been as fortunate. Another investor who went long on Ethereum lost $5.21 million. This individual purchased 18.6 ETH using 20x leverage, but their position is at risk of liquidation if Ethereum’s price falls to $1,725.

Technical Analysis: Bearish Indicators Persist

From a technical perspective, Ethereum’s price action suggests further downside potential. The daily chart reveals that Ethereum remains below the critical support level of $2,135, which served as the neckline for a triple-top pattern at $4,000. Key indicators are painting a bearish picture:

Key Technical Patterns

  • Death Cross: The 50-day and 20-day moving averages crossed in February, signaling bearish momentum.
  • Bearish Pennant Pattern: Ethereum is forming a pennant pattern with a long vertical line and a symmetrical triangle. The triangle is nearing its confluence point, suggesting a potential bearish breakout.

If Ethereum breaks below the current pattern, prices could decline further to the psychological level of $1,500, approximately 20% below its current trading price.

“Ethereum’s price action continues to face downward pressure, with technical indicators pointing to a possible retest of lower support levels.”

As the market navigates these turbulent times, Ethereum’s price movements will be closely monitored by traders and investors alike. Understanding market dynamics and employing risk management strategies will be crucial for anyone participating in this volatile space.

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