Ethereum Traders Face $32.73 Million Loss Amid Crypto Market Correction
Ethereum Price Drops 7% as Crypto Market Corrects
Ethereum’s price experienced a significant drop of nearly 7% in the past day as the overall crypto market went through a correction on Monday. This decline was led by Bitcoin, which fell below the psychologically important level of $40,000 for the first time since December 3.
Improved Sentiment Offers Hope for Ethereum’s Recovery
Amidst the ongoing correction, there are signs of improvement in sentiment among Ethereum traders, raising the chances of a potential recovery in the altcoin’s price. As Ethereum’s funding rate declines alongside its price drop, it indicates a cooling-off in the derivatives market, which is a positive sign for the overall market outlook.
Ethereum Traders Register $32.73 Million Loss in a Single Day
According to Ethereum’s Network Realized Profit/Loss (NRPL) metric, traders suffered losses amounting to $32.73 million on Monday. This marks the first time since October 13 that Ethereum traders realized a loss. However, despite these losses, on-chain indicators suggest a potential recovery for the altcoin.
Key Metrics Signal Possibility of Ethereum Price Reset
Two key metrics, Ethereum’s funding rate and weighted sentiment, signal a potential reset in the altcoin’s price trend. The sentiment among traders, as indicated by data from crypto intelligence tracker Santiment, has recovered from its recent low on Monday. Additionally, the decline in the funding rate points towards a cooling-off period in the derivatives market, further supporting the possibility of a recovery for Ethereum.
Technical Analysis Indicates Support and Resistance Levels
In terms of technical analysis, Ethereum’s price could find support at $2,232, which is the 50% Fibonacci retracement level of its decline from April 2022 to June 2022. If the current selling pressure subsides at this level, it could pave the way for a rebound towards the altcoin’s previous peak of $2,446. However, a daily candlestick close below $2,232 could invalidate the bullish thesis and potentially lead to further decline, with the next support zone being between $2,086 and $2,056.
Disclaimer and Cautionary Note
It is important to note that investing in the cryptocurrency market carries a significant amount of risk, including the potential loss of all or a portion of one’s investment. The information provided in this article is for informational purposes only and should not be construed as financial advice. Investors are advised to conduct their own research and exercise caution before making any investment decisions.
Analyst comment
Positive – Improved Sentiment Offers Hope for Ethereum’s Recovery
As an analyst, I predict that the market will potentially see a recovery for Ethereum as sentiment among traders improves. The decline in funding rate and cooling-off period in the derivatives market support this possibility. However, it’s important to exercise caution and conduct further research before making any investment decisions.
