Ethereum recent 7% correction raises concerns about its future. From whale activity to macroeconomic pressures, uncover the insights behind this pullback. Find out what this means for your crypto portfolio.
Despite reaching a new all-time high at the end of August, Ethereum is once again experiencing a difficult period, trading around $4,360. This recent 7% drop in one week raises numerous questions about the factors behind this new decline.
On-chain data reveals that major investors, known as “whales“, have transferred thousands of Ether to exchange platforms, a classic sign of profit-taking. Additionally, American Ethereum ETFs recorded net outflows of $135 million on September 2, suggesting a withdrawal movement among investors.
September has historically been a difficult month for cryptos, with an average decline of 4% for Bitcoin and a similar trend for Ethereum. This seasonal phenomenon, nicknamed “red September,” is explained by portfolio rebalancing and decreased liquidity in the markets.
Ethereum is also falling amid persistent macroeconomic uncertainty. Investors remain cautious about the evolution of the US Federal Reserve’s monetary policy, which is struggling to control inflation. This risk aversion translates into profit-taking on the most volatile assets like Ethereum.
In summary, the recent drop in Ethereum can be explained by a combination of factors: profit-taking by large investors, unfavorable seasonality, and macroeconomic uncertainties. Until the Fed adopts a more accommodative policy, digital assets risk remaining under pressure. Investors should exercise caution in the coming weeks.
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Charles Ledoux is a Bitcoin and blockchain technology specialist. A graduate of the Crypto Academy, he has been a Bitcoin miner for over a year. He has written numerous masterclasses to educate newcomers to the industry and has authored over 2,000 articles on cryptocurrency. Now, he aims to share his passion for crypto through his articles for InvestX.
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