Despite Bitcoin surpassing $60k and the overall crypto market attempting to rebound, Ethereum has struggled to keep up. As the second largest cryptocurrency by market cap, ETH has been on a downward trend.
Currently, Ethereum is priced at $2,410, reflecting a 7.95% decrease over the past month.
After reaching a peak of $2,820, Ethereum has failed to sustain an upward momentum and dropped to $2150.
Prior to the recent market downturn, ETH was performing well, reaching $3,563 in July during a surge in ETF investments. However, the market has since been bearish, raising concerns of further losses.
Despite the challenging market conditions, analysts are still optimistic. Notably, prominent crypto analyst CryptoWZRD has predicted a forthcoming rally, pointing to Bitcoin’s recent breakout.
Market Sentiment and Its Impact
In his analysis, CryptoWZRD highlighted the current state of the Bitcoin market. According to his assessment, if Bitcoin rallies, Ethereum could see a 48% increase to $3,550.
The relationship between Bitcoin’s performance and that of altcoins like Ethereum is crucial. As Bitcoin’s price rises, it typically drags the entire market up, including altcoins. Conversely, a decline in Bitcoin often leads to losses in altcoins such as ETH.
Therefore, Ethereum’s future performance is closely tied to Bitcoin’s market movement. A positive trend in Bitcoin usually bodes well for Ethereum.
Insights from Ethereum Charts
While CryptoWZRD’s analysis paints a positive picture, other indicators suggest a different scenario, potentially setting Ethereum up for further decline.
For instance, Ethereum’s exchange netflow has remained positive in the past month, signaling that ETH is flowing into exchanges rather than being withdrawn. This typically indicates a bearish sentiment as traders deposit ETH to sell, anticipating a price drop.
Furthermore, the exchange supply ratio has surged in the last five days, indicating increased inflow to exchanges, a sign of bearish sentiment as traders prepare to offload their holdings.
Moreover, data on Ethereum’s ownership concentration reveals that retail traders currently hold more ETH than larger investors and whales. This imbalance often leads to high market volatility, as smaller traders tend to react emotionally to news, unlike institutional investors.
While whales tend to hold onto their assets during downturns and accumulate more, retail traders are likely to sell to prevent further losses.
As per the current market sentiment, ETH is facing bearish conditions. If these trends persist, Ethereum could drop to $2,224; however, a breakout from this pattern could propel it to $2,527.