During the weekend, Ethereumthe second-largest digital asset, has been hit by a significant drop in its price, triggering a broader negative sentiment around the crypto asset and the factors that could be responsible for the drop. Delving deeper into the matter, popular crypto analyst and trader Michael Van De Poppe gave his take on ETH’s recent price action, attributing it to Capitulation.
Ethereum Price Drops Due to Capitulation
Renowned market expert Michael Van De Poppe, provided his thoughts on Ethereum with the crypto community on Platform X (formerly Twitter). His take highlights the heavy selling pressure and panic from traders, which played a role in ETH’s collapse.
According to Van De Poppe, since the listing of the Ethereum spot exchange-traded fund (ETF), ETH has shown notable weakness in the previous weeks, falling to a new low for the first time in six months, reflecting BitcoinThe movement of.
Van De Poppe believes that the massive outflows from Grayscale’s ETHE Trust following the launch of the ETH spot ETFs had a significant negative impact on the product, causing ETH to weaken. On the first day of trading, Poppe noted that Grayscale saw an outflow of over $400 million, but by Friday, that amount had fallen to around $60 million.
It also highlights Jump Trading’s massive liquidation strategy, as the firm was cited for selling over $500 million worth of Ethereum less than 2 days after listing ETH spot ETFs, and it continued to do so throughout the weekend.
Although Van De Poppe considers these factors to be the main reasons for ETHGiven the country’s recent weakness, he believes the developments are happening because of the capitulation of the last two weeks, which has probably ended.
Van De Poppe called the recent significant decline a capitulation, as that term is often used to describe such a severe correction in which double-digit losses occur over a short period of time. Furthermore, the analyst said he would prefer to see such a significant correction because it suggests the downtrend is almost over.
Economic turmoil fuels crypto asset plunge
As Ethereum continues to fall, Van De Poppe pointed out several negative developments in the world that may have accelerated the decline in the previous weeks. The first trigger highlighted by the analyst is the defeat of former US President Donald Trump in the battle for the presidential seat with the vice president Kamala Harrisas 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 intensified due to the deaths of Hamas” leader in Iran.
Other triggers include multiple stabbings in the UK, growing demand for rate cuts following dire economic data on the labour market released on Friday, and Japan suffering its worst day for stocks since Black Monday in 1987.
Featured image from iStock, chart from Tradingview.com
