Ethereum's Recent Slump: What's Happening and Why It Matters

Ethereum's value has taken a hit, dropping 7% to $3, 400. This isn't just a small dip; it's a sign of bigger things happening in the crypto world. The price has fallen below key moving averages, showing that selling pressure is strong. Right now, Ethereum is hanging on in a support zone between $3, 600 and $3, 450. If it can't hold this ground, the next stop could be $2, 850, a major accumulation zone. This drop isn't happening in isolation. The broader crypto market is feeling the heat, with Bitcoin and XRP also down. This suggests a risk-off sentiment across major cryptocurrencies. Exchange flows show heavy selling, with $222 million leaving exchanges in a single day. This kind of outflow often means long-term holders are cashing in profits, which can drive prices lower. Looking at derivatives data, open interest has fallen by almost 6% in the past 24 hours, while trading volume has increased. This usually means traders are closing positions rather than opening new ones. About $150 million in long liquidations occurred in just 12 hours, showing that leveraged positions are being unwound. The long-to-short ratio is still slightly positive, but the overall data suggests that bullish conviction is weakening. For Ethereum to regain its bullish momentum, it needs to reclaim the area near $3, 900 to $4, 050. Until then, sellers are in control, and the risk of a deeper correction remains high. The current situation is a mix of technical weakness and broader market pressure, making it a challenging time for Ethereum holders.