On June 13, 2024, with the intense volatility following the Fed’s announcement of a rate pause, the price of Ethereum fell sharply to a 25-day low of $3,428; on-chain data trends indicate further declines are possible in the future.
Ether price falls below $3,500 for first time since ETF approval
The crypto market has been in a consolidation phase for much of the past month. During this period, Ethereum was able to outperform the market average, driven by a bullish trend due to the SEC’s approval of an ETF in late May.
However, three weeks after the official approval ruling, fund sponsors are still stuck, having yet to complete the final adjustments to their filings in order to officially list the Ethereum ETF.
After another week of minimal progress, with no tentative listing date in sight, investors now appear to be growing impatient. That led to a sharp fall in prices after the Federal Reserve announced a hawkish rate pause on June 14, ending hopes of a cut that many bullish analysts had expected in the first half of 2024.
As shown above, the ether price fell 9.71% in a one-week period, giving up most of the gains it had made following the ETF approval. The chart shows that Ether fell to $3,362 on June 14 before rebounding to $3,550 at the time of writing on Saturday, June 15.
But it’s worth noting that the last time Ether was below $3,400 was before May 21, when the rally was sparked by news of a de facto Ether ETF approval published by a Bloomberg analyst. This suggests that the delay in the official launch of the ETF has adversely affected the demand for Ether this week, increasing the risk of further declines.
Selling pressure from long-term Ethereum holders rises 10%
Apparently, demand for Ethereum has been declining recently as bulls are getting tired from the 3-week break surrounding the official Ethereum ETF launch.
However, looking at on-chain data, recent activity among existing Ether holders suggests the market volatility may not be over yet.
Santiment’s Mean Coin Age data tracks the average number of days spent by all ether in circulation. When a large number of long-term holders are actively selling, the Mean Coin Age decreases, and vice versa.
As shown in the chart above, the Ethereum Mean Coin Age (365d) has dropped dramatically since May 29th as people realized that the Ethereum ETF would not be launched until a few weeks after the official SEC ruling on May 24th.
From May 29 to June 15, when we publish, the average coin age of Ether fell 10% from 172.23 to 164 days.
Such a significant drop in a short period of time suggests that more and more long-term Ethereum investors are starting to sell coins they had previously held on to for a year or more. This suggests that they have been selling their coins behind the scenes to take advantage of the surge in prices following the ETF approval.
With a sizeable amount of coins having been locked up for over a year now coming back into circulation, the ETH price may experience more volatility in the coming days.
Disclaimer: This content is for informational purposes only and should not be considered financial advice. The opinions expressed in this article may include the personal opinions of the author and do not reflect the views of The Crypto Basic. Readers are encouraged to conduct in-depth research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
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