Ether’s price has declined by 10% since the approval of spot Ether ETFs, with open interest depreciating by over $250 million in the past 24 hours. The long-term chart indicates a major bearish signal, as ETH’s daily candle closed under the 200-day moving average (200-DMA), a move historically associated with price corrections.
Spot Ether ETFs and Market Hope
Despite the downturn, spot Ether ETFs posted a net inflow of $26.7 million on August 1, offering a minor glimmer of hope to the Ethereum ecosystem. However, this positive development has not been enough to counter the prevailing bearish sentiment.
ETH/USD on 1-day chart. Source: Trading View
Declining Ethereum Fees
Ethereum fees have seen a significant drop since March. During the first quarter of 2024, Ethereum generated average daily fees exceeding $10 million, with March’s average peaking at $15 million daily. However, in Q2, the average annualized fee plummeted to roughly $3.5 million, and July’s total revenue averaged under $3 million. The decline in fees reflects a drop in DeFi activity, with over $10 billion in value wiped out since June 7, according to DefiLlama.
Ethereum daily fees and active users (weekly) chart. Source: Token Terminal
Ether’s Price Support at $2,700
Data from IntoTheBlock shows that approximately 3.69 million addresses hold 1.24 million ETH around the $3,000 price point, marking Ether’s immediate and psychological support. However, this support is relatively weak compared to the critical support at $2,700. At this range, 11.11 million addresses hold 59.07 million ETH, acquired at an average of $2,647. This level was successfully tested as support several times in early July.
Market Sentiment and Potential Bounce
Crypto trader Poseidon suggests that the $2,700 support range might not hold upon another retest, stating, “It looks awful in the lower time frame. I don’t see any reason why we shouldn’t go below $2700. Patience.” However, chart technicals indicate that ETH has consistently bounced back almost immediately each time it has deviated under $3,000 over the past three months, suggesting strong demand in this area.
Ethereum addressesing holding ETH. Source: intotheblock
The chart shows equal lows formed around $2,700, and another potential bounce at $2,650–$2,700 is possible. Therefore, it should not come as a surprise if Ether quickly rebounds from under $3,000 once again. The current bidding range offers a new dynamic and change in market structure, but further consolidation at these levels may see the ETH price reverse from its previous equal lows.
