Despite Hong Kong’s ETF approval, Ethereum sees increased liquidations and bearish sentiment, with shorts rising by 54%.
Ethereum faces price volatility due to geopolitical tensions and regulatory concerns, dipping below $3,000 briefly this week.
Ethereum (ETH), the second-largest cryptocurrency by market capitalization, faced significant price volatility this week, briefly dipping below the $3,000 mark. This downturn followed a combination of geopolitical tensions and market sentiments surrounding regulatory developments.
Tensions between Iran and Israel contributed to market jitters, suppressing the positive impact of Hong Kong’s approval of a spot Ethereum Exchange-Traded Fund (ETF) as previously reported by Crypto News Flash. Investors exercised caution across the cryptocurrency landscape, with Bitcoin and other altcoins also experiencing losses. Notably, Ethereum saw a 20% decrease in risk reversals on Tuesday, indicating heightened nervousness among investors.
Data from Santiment revealed a surge in Ethereum liquidations, totaling over $81.9 million within 24 hours. Long positions accounted for the majority of liquidations, totaling $67.4 million. The largest liquidation, valued at $6 million, stemmed from an ETH-USD swap. Moreover, discussions surrounding Ethereum intensified after the Hong Kong ETF was approved, making it the most trending token among traders. However, bearish sentiment persisted, as evidenced by a 54% rise in ETH shorts.
Ethereum Foundation’s Issuance Reduction Proposal
Despite recent developments, the Ethereum Foundation’s proposal to reduce ETH issuance garnered attention. Glassnode’s report highlighted ongoing criticism of the proposal despite clarifications emphasizing its aim to maintain Ethereum’s status as a form of currency and balance governance power within the network.
Glassnode also addressed the rise of restaking and liquid restaking tokens, impacting Ethereum’s inflation rate and holders. These tokens, offering significantly high yields, facilitate a wealth transfer from non-staked ETH holders to staked counterparts. Consequently, there is a potential shift in the “real yield” and the role of money within the Ethereum ecosystem, potentially favoring projects issuing derivative tokens.
According to a recent analysis conducted by Changelly, a prominent cryptocurrency data provider, Ethereum could experience a notable surge in price following the Bitcoin halving. Changelly predicts that on April 21, 2024, just one day after the halving event, Ethereum could reach a price of $3,171.61. This forecast has sparked optimism among Ethereum investors, who eagerly anticipate the potential for significant gains.
Changelly’s analysis extends beyond the immediate aftermath of the Bitcoin halving, offering a bullish long-term outlook for Ethereum. By June 2025, Changelly suggests that Ethereum could surpass its previous all-time high and reach an impressive price of $4,964.07. Such a milestone would mark a new record for the cryptocurrency, signaling continued growth and potential for further appreciation.
Ethereum Struggles to Break Key Resistance
ETH’s price trajectory has been marked by challenges in surmounting key resistance levels, particularly the $3,200 mark. The cryptocurrency remains below this critical threshold, along with the 100-hourly Simple Moving Average, signaling persistent bearish pressure. Additionally, a notable bearish trend line has formed with resistance at $3,120 on the hourly chart of ETH/USD, sourced via Kraken.
Following a brief period of consolidation, Ethereum experienced a minor recovery attempt, briefly surpassing the $3,000 resistance zone. However, this upward momentum was stifled as bears asserted control near the $3,280 resistance zone, resulting in a subsequent downturn. The price retraced below the 23.6% Fibonacci retracement level of the upward move from the $2,536 swing low to the $3,278 high, underscoring the prevailing bearish sentiment.
