Anika Begay
During the weekend, Etherealthe second-largest digital asset, has taken a hit as its price has dropped significantly, triggering broader negative sentiment around the crypto asset and the factors that could be responsible for the decline. Digging deeper into the matter, renowned cryptocurrency analyst and trader Michael Van De Poppe offered insights into ETH’s recent price action, attributing it to Capitulation.
Ethereum Price Crash Due to Capitulation
The well-known market expert, Michael Van De Poppe, provided his insights on Ethereum with the crypto community on the X platform (formerly Twitter). His perspective points to the substantial selling pressure and trader panic that played a role in ETH’s crash.
According to Van De Poppe, from the listing of spot Ethereum Exchange-Traded Funds (ETFs), ETH has shown notable weakness in the previous weeks, falling to a new low for the first time in six months, thus mirroring Bitcoinmovement of .
Van De Poppe believes that Grayscale’s massive ETHE Trust outflows following the launch of spot ETH ETFs have had a significant negative impact on the products, causing weakness in ETH. On the first day of trading, Poppe noted that Grayscale saw over $400 million in outflows, but by last Friday, that amount had dropped to around $60 million.
It also highlights Jump Trading’s massive liquidation strategy, as the company was cited for selling over $500 million in Ethereum in less than 2 days after listing its spot ETH ETFs, and continued to do so throughout the weekend.
Although Van De Poppe believes that these factors are the main reasons for ETHGiven the recent weakness, he believes that the developments are due to the capitulation of the last two weeks, which is probably over.
Van De Poppe classified the recent significant decline as a capitulation because it is often used to describe such a severe correction where double-digit losses occur in a short period of time. Furthermore, the analyst said that he would prefer to see such a significant correction because it suggests that the downtrend is almost over.
Economic turmoil fuels cryptocurrency decline
As Ethereum continues to decline, Van De Poppe highlighted several negative developments around the world that may have accelerated the decline in the previous weeks. The first trigger highlighted by the analyst is former US President Donald Trump losing the battle for the presidential seat to the Vice President My life is niceas Harris begins to gain more votes in the polls.
The second development highlighted by Van De Poppe is the ongoing war between Israel and Gaza, which has been aggravated by the deaths of Hamas‘ leader in Iran.
Other triggers include the multiple stabbings in the UK, growing demand for rate cuts following Friday’s dire labor market data and Japan having its worst stock market day since Black Monday in 1987.
Featured image from iStock, chart from Tradingview.com
