Ethereum (ETH) bulls are facing a harsh reality as the price tumbled to a 25-day low of $3,428 on June 13th. This sudden drop comes amidst growing impatience surrounding the launch of long-awaited Ethereum ETFs and hints at potential further decline.
ETF Delays Dampen Enthusiasm
Following the exciting news of the US SEC approving Ethereum ETFs in late May, the crypto market experienced a period of consolidation. However, three weeks later, with no confirmed launch date for the ETFs, investor optimism has waned. This frustration intensified after the US Federal Reserve’s hawkish rate pause announcement, dashing hopes for an interest rate cut in H1 2024.
The combined effect of these factors led to a significant price decline. ETH lost 9.71% within a week, erasing most of the gains made post-ETF approval. While the price has rebounded slightly to around $3,550 at the time of writing, the last time ETH traded below $3,400 was pre-ETF approval in May. This highlights the negative impact of the launch delay on Ethereum demand.
Long-Term Holders Hit the Sell Button
On-chain data reveals another concerning trend: rising selling pressure from long-term ETH holders. Santiment’s Mean Coin Age metric, which tracks the average number of days coins have been held in their current addresses, indicates a potential exodus.
A decline in Mean Coin Age suggests long-term holders (those holding for a year or more) are actively selling. The data shows a 10% drop in ETH’s Mean Coin Age since May 29th, falling from 172.23 days to 164 days. This suggests they might be capitalizing on the post-approval price surge by selling their holdings.
Also Read: Ethereum ETF Hype! SHIB, LINK, ETH Exchange Supply Drain – Get Ready For Liftoff?
Volatility on the Horizon
The confluence of delayed ETF launches and long-term holder selling creates a recipe for continued volatility in the ETH market. With a significant number of previously dormant coins now back in circulation, the price is likely to experience further fluctuations in the coming days.
The takeaway? While the long-term outlook for Ethereum remains promising, the short-term picture appears uncertain. Investors should be cautious and closely monitor market developments, particularly regarding the ETF launch and on-chain data trends..
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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