The cryptocurrency market experienced a significant downturn over the weekend, with Ethereum (ETH) being one of the hardest hit. The second-largest digital asset saw its price fall substantially, triggering a broader negative sentiment around the crypto asset.
According to popular crypto analyst and trader Michael Van De Poppe, the recent price action of ETH can be attributed to capitulation.
Van De Poppe shared his insights on Ethereum’s recent price action with the crypto community on X (formerly Twitter). He pointed to the substantial sell-off pressure and traders’ panic as contributing factors to ETH’s collapse.
The analyst noted that since the spot Ethereum Exchange-Traded Funds (ETFs) was approved and listed, ETH has exhibited notable weakness, falling to a new low for the first time in six months.
Grayscale’s Trust ETHE Outflows
Van De Poppe believes that Grayscale’s Trust ETHE huge outflows following the launch of the spot ETH ETFs have greatly impacted the products negatively, causing weakness in ETH. On the first day of trading, Grayscale witnessed an outflow of over $400 million, which has since fallen to around $60 million.
Jump Trading’s Liquidation Strategy
The analyst also pointed to Jump Trading’s massive liquidation strategy, which has seen the company offload over $500 million worth of Ethereum (ETH) in under two days. This liquidation has continued throughout the weekend.
Van De Poppe considers these factors as the major reasons for ETH’s recent weakness but believes that the developments are happening due to capitulation in the past two weeks, which has likely ended.
The analyst views capitulation as a severe correction characterized by double-digit losses over a brief period. He suggests that such a significant correction may indicate that the downtrend is almost over.
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In addition to the factors mentioned above, Van De Poppe highlighted several negative global developments that may have accelerated ETH’s decline. These include the ongoing war between Israel and Gaza, multiple stabbings in the UK, growing demands for rate cuts due to poor economic data, and Japan’s worst stock market day since 1987’s Black Monday.
Ethereum’s recent decline can be attributed to a combination of factors, including capitulation, Grayscale’s Trust ETHE outflows, and Jump Trading’s liquidation strategy. While the global economic turmoil has also played a role, Van De Poppe’s insights suggest that the downtrend may be coming to an end.
Disclaimer: This content is meant to inform and should not be considered financial advice. The views expressed in this article may include the author’s personal opinions and do not represent Times Tabloid’s opinion. Readers are urged to do in-depth research before making any investment decisions. Any action taken by the reader is strictly at their own risk. Times Tabloid is not responsible for any financial losses.
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