Ethereum price dropped 6.8% in a single day to trade at a bit above $4,173. The decline erased over $44 billion of market cap within a week, casting some doubt on whether the bulls could protect the $4000 level. This comes a month after Ethereum reached its all-time high, but fell by 15% and is currently at $4,953.
During the recession, the trading activity rose significantly. The volume also grew by 122% to reach 41.86 billion per day, meaning that there was high participation between buyers and sellers. Ethereum's market cap has peaked at a new high of 500.67 billion, which indicates overall market pressure on the asset.
In technical charts, Ethereum fell below several crucial supports. The 30-day SMA of $4,465, the 78.6% Fibonacci retracement of $4,378, and the horizontal support of $4,394 all broke. Indicators support the bearish setup, as the RSI declined to 18.7, which shows the situation of extreme oversold. The MACD histogram of -13.94 is also indicative of accelerating negative momentum.
The fall caused a series of ETH liquidations in derivatives markets. Overall, these funds were in high demand, at $452 million in the last 24 hours, with a long position taking almost three-quarters of the volume. Analysts pointed out that the sell-off grew worse as ETH crossed above $4,400 because the automated stop-loss orders were activated. Critical support is now between $4,000 and $4,221, and the 200-day EMA stands at $3,393, which will become a far-off downside target in case of further selling.
Also Read: Vitalik Buterin Proposes Low-Risk DeFi as Sustainable Revenue Source for Ethereum
The sentiment changed as the Fear and Greed Index went down to 47, shifting the mild optimism of the previous week to a more prudent number. Ether had a greater turnover ratio of 8.71% than Bitcoin, which has 5.2%, indicating that traders preferred to have less exposure to volatile assets. Global uncertainties, such as the decisions on Federal Reserve policy and instability in Chinese markets, piled up strain on the outlook.
After phishing attacks associated with EIP-7702 wallets incurred losses of $150,000,000 through the approval of malicious contracts, security issues came into view again. Even though the events are not directly related to the Ethereum protocol, the incidents demonstrate that users are still threatened.