Tron founder Justin Sun is asking the crypto community about what is happening to Ethereum, against the backdrop of liquidations that reached $2.1 billion in the last two weeks. On Monday, Sun pointed out the network’s high-leverage trading issues, which he deemed would cause losses to decentralized finance protocols using the blockchain.
As of Thursday’s early Asian trading session, ETH was valued at $1,880, a 51.63% decline over the past three months, when it clocked $3,888 during the December bull run. Bears have driven the crypto down 30.6% in the last 30 days and nearly 18% in the past week, per Coingecko.
Market watchers weigh in on Ethereum’s struggles
Sun’s question had a fair few responses from the crypto community, including a controversial one from artificial intelligence crypto finance system PostFiat founder Alexander, who pointed to Ethereum’s inability to sustain meaningful transaction growth since its 2017 peak.
Alexander bashed the network for failing to become deflationary when it moved from a proof-of-work (PoW) to a proof-of-stake (PoS) model, noting that the most actively used parts of the blockchain, such as Arbitrum (ARB) and Base, are either highly inflationary or centralized.
“So begs the question…. What is the point of the chain to which the answer is: the same thing as every other blockchain. To move tether about and to ‘store value’ Pretty depressing tbh.” he remarked.
In a March 13 X post, CryptoQuant CEO Ki Young Ju shared a chart that showed the record selling pressure on Ethereum over the past three months. On-chain data revealed that $1.8 billion worth of ETH exited exchanges last week, the largest outflows since December 2022.
According to the chart, the last time ETH had a 30-day positive moving average was on February 26, when Bitcoin’s price was stumbling towards $82,000. The coin’s 24-hour Coinbase premium index has also been trending in the red for the past seven days, spelling weakening buying pressures from US traders.
Ethereum’s trading volume has plummeted by 38.17% to $36.82 billion, and open interest (OI) in futures has also dropped by 2.61% to $18.05 billion, suggesting there are more traders exiting positions than opening new ones.
CryptoQuant data also shows that options volume has declined by 7.43% to $663.71 million, but options open interest has increased by 2.17% to $5.77 billion, showing there is a rising demand for longer-term derivatives positions as traders wait to see where ETH’s price will go.
Will Ethereum recover?
Ethereum’s price action as of now looks largely bearish; bulls are slowly ceding control to market bears, dragging the crypto’s price down further. In the past 24 hours, ETH futures liquidations reached $43.12 million, according to Coinglass.
Of this total, $26.94 million were long liquidations, while $16.18 million came from shorts, indicating a market lacking clear direction.
Analysts have outlined two possible scenarios for Ethereum’s next move. A bearish breakdown could see ETH fall below the $1,440 threshold, potentially triggering further declines toward the $1,000 mark. On the other hand, a recovery above resistance levels near $1,960 could help the coin garner some positive momentum, with a possible push toward $2,200.
Technical indicators like the Relative Strength Index (RSI) at 32.1 and Stochastic Oscillator (Stoch) at 25.1 are nearing oversold territory, adding to the bearish momentum. A failure to hold above the $1,750 psychological support zone may increase selling pressure, while a daily close below $1,700 could invalidate any consolidation attempts, accelerating the downward trend.
One trader on social media has spotted a historical ETH 3-year Stochastic RSI trend, which dictates that oversold levels preceded the start of an upward price rally.
Still, the prediction was dismissed by a commenter, stating:
“Notice how the previous two times, it was during peak bear. So very expected. But now it’s happening during mid bullrun, which has never f*cking happened. That’s really really bad. Not supposed to happen, my guy.”
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This articles is written by : Nermeen Nabil Khear Abdelmalak
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