Ethereum surges around 6% in the last 24 hours, soon to lose 2%. Currently ETH is trading at $2,639 and still fighting to take an upper route, which looks very difficult to achieve looking at the market conditions. But the question is, what made Ether jump 6% and why did it lose 2%? Let’s explore the reasons behind these movements.
True Follower of Bitcoin
It is commonly known among crypto enthusiasts that Ethereum being the number two crypto on the market chart follows the leader of digital space. More than 95% of times, ethereum follows the pattern of Bitcoin, whether to rise or to fall. One major reason for this is market sentiments. Bitcoin has a market dominance of 56.4% while ETH has 14.3%. In any asset market, the asset with the top market dominance is followed by others. If investors lose confidence in Bitcoin, the market of Ethereum will also plummet. In my article about Bitcoin, I have shared the reasons for the movement of Bitcoin in the last 24 hours that Ethereum is following.
A Zone of Resistance
The area of $2,670 has been a zone of high resistance for Ethereum, since April 23, 2021, first time ETH touched this spot. This price zone has always played a strong support or resistance depending on the side the asset is moving. This is a major reason for this rejection. Crypto assets with strong fundamentals are considered to follow their support and resistance zone with much respect. This is the reason, trend lines have so much value while performing technical analysis.
Ethereum was rejected from the same spot exactly a month ago and it ended up closing up on $2,220 a week later. With current trend, it looks like if this rejection persists, Ethereum can come down to $2,540 which is a close support as well as a cross-over by a same month trend line.
Ethereum Foundation Sell-Off
The wallet related to the Ethereum Foundation funded from the wallet of Vitalik Buterin has been on a selling spree. In September 2024, the foundation sold off 1,150 ETH worth $2.80 million. Etherscan data shows that on September 23, Ethereum foundation sold 200 Ethereum for 527,989 Dai.
Along with these sell offs, Ethereum Foundation has also been sending funds to many wallet addresses. A few days ago, Vitalik informed the community that he has not sold a single ETH for personal profits, but the Foundation has been providing grants to potential projects.
Looking Ahead!
September has been a bearish month in the history of crypto. Amidst all the chaos, the movement in the crypto assets provides opportunities for the community, however some see such sudden movements as a danger. Lack of proper knowledge and techniques for sure causes losses however traders and investors should always proceed with precaution and research. It would be interesting to see if Ethereum tries to cross the resistance again or will wait for October.
