Ethereum [ETH] remains a significant player in the digital currency realm, and as we approach the final quarter of the year, several crucial elements are poised to impact its price trajectory.
Towards the end of September, individual traders upped their involvement in Ethereum, aiming to leverage price declines. Nonetheless, this move resulted in many being ensnared in unprofitable positions as the value of ETH continued to slide.
As similar patterns reemerge, traders are apprehensive about the potential further decline of ETH in the closing months of the year.
ETH Price Movement Indicates Bearish Trend
Observing Ethereum’s recent price movement, there are indications that the ETH/USD pair could persist in its descent. On the daily chart, ETH is currently trading below the 150, 50, and 20 exponential moving averages (EMAs), hinting at a bearish trajectory.
This sentiment is further bolstered by the S&P 500 (SPX) index, which has also dipped below the 150 EMA, reinforcing the negative perspective.
Furthermore, the volume bars hint at a prevailing control by sellers, strengthening the notion that ETH might continue to disappoint traders by extending its downward trend.
Impact of Initial Coin Offerings and Grayscale Activity on ETH
Data from on-chain sources contributes to the prevalent bearish sentiment, particularly concerning initial coin offerings (ICOs) and the actions of Grayscale. A substantial participant in Ethereum ICOs recently offloaded 19,000 ETH, valued at approximately $47.54 million.
This participant had initially obtained 150,000 ETH during an ICO, at a purchase price of $46,500, now valued at $358 million.
With early Ethereum whales divesting their assets, the downwards pressure escalates, particularly as ETH has tended to exhibit bearish tendencies during the final quarter following positive movement in September in previous years.
Moreover, two dormant Grayscale ETF wallets have transferred 5837 ETH, equivalent to $14.17 million, to Coinbase as reported by Onchain Lens.
These wallets previously contained 23,026 ETH, purchased at an average price of $1,593 a year ago.
The movement of these funds, coupled with the remaining 17,189 ETH in the wallets, further suggests that significant investors are making strategic moves that could influence ETH’s pricing.
Trader Sentiment Overview
Both individual traders and major investors appear to share a negative view concerning Ethereum’s value. This shift came about following recent global events that triggered a downturn in the broader cryptocurrency market.
Consequently, ETH is anticipated to encounter heightened selling pressure, potentially resulting in additional price declines in the fourth quarter.
Ethereum’s Financial Resilience and TVL Dominance
Despite the prevailing bearish sentiment, Ethereum showcases strength in other aspects. The network has generated over $140 million in profits across nine different chains over the past year.
Operating as a federated network of economies with ETH as its primary unit, Ethereum remains a hub of opportunities that could potentially reverse the current negative trajectory.
Additionally, Ethereum continues to lead in total value locked (TVL) compared to rival Layer 1 blockchains, with a market cap of $48.7 billion overshadowing competitors like Solana ($5.4 billion) and Sui ($984 million).
This dominance in TVL signifies ETH still retains a leading status in the market, despite the bearish signs and challenges emanating from emerging blockchains.
While Ethereum confronts a pessimistic outlook in the near term, its robust fundamentals and market positioning might pave the way for a recovery in the long run.
Nonetheless, traders should exercise caution as market dynamics undergo continuous evolution.