Ethereum has dropped about 20% over the past 24 hours, falling below $1,500 for the first time since March 2023.
The price of Ethereum has reached a 24-hour high of $1799, and it is now trading at $1,476 at the time of this publication. Donald Trump’s sweeping new tariffs are exerting pressure on the cryptocurrency market, and as a result, the broader selloff appears to be connected to macroeconomic issues.
As a consequence of the significant increase in the price of ETH, the market has seen widespread losses. In the previous twenty-four hours, statistics from Coinglass indicate that positions worth more than four hundred million dollars in Ethereum have been liquidated.
The vast majority of the liquidation was a result of long transactions, which resulted in a loss of approximately $341 million. The amount of open interest in Ethereum futures has decreased by fifteen percent as a result of traders selling their contracts.
Especially heavily harmed was a significant investor who stands out. Lookonchain’s post on X from April 7 revealed that a whale who had taken out a significant loan on the decentralized financial platform Sky (previously Maker) lost 67,570 ETH, which is equivalent to more than $100 million.
ETH was used as collateral for the loan, and when the price of ETH declined, the system automatically liquidated the collateral to meet the obligations of the loan. Ethereum has been going through a turbulent few months, with the exception of the most recent selloff.
It ended the first quarter of the year with a loss of approximately $170 billion in value, or a decline of 45%. This loss resulted in the third-worst quarter for Ethereum since the third quarter of 2016. The network’s fee income plummeted significantly, from $142 million in January to barely $21 million in March, according to data provided by DefiLlama.
This occurred despite the fact that the network led the DEX trade volume in March.It was the March 2024 EIP-1559, also known as the Dencun upgrade, that contributed to the reduction of transaction fees. This improvement helped reduce fees. Ethereum, on the other hand, showed signs of inflation once more.
After reaching its lowest point since August 2021, the burn rate of ETH, which is a significant signal of deflation, has reached its lowest point. Following a generally bullish forecast for the year 2024, analysts appear to be treating ETH with a greater degree of caution for now.
As a result of the increasing competition with Ethereum layer-2 solutions, analysts at Standard Chartered reduced their price prediction for Ethereum at the end of the year from $10,000 to $4,000. These rollups continue to attract users away from the main chain by providing faster speeds and lower costs than the main chain does already.
Although the forthcoming Pectra update will strive to improve the fundamentals of the network, it is anticipated that the continuous pressure from the macroeconomic environment will still have an effect on the price of Ethereum.
