Why is Ethereum weak? Can it hold $2,100?

▲ Ethereum (ETH), cryptocurrency decline/AI generated image ©

Analysis suggests that the sharp drop in Ethereum is not merely a simple correction, but a complex pressure stemming from institutional selling and macroeconomic caution.

According to CoinMarketCap, a cryptocurrency market aggregator, on April 9 (local time), Ethereum (ETH) recorded a 2.20% drop over 24 hours, reaching $2,185.08, showing a weaker trend than the market average. It was suggested that while the recent rebound formed by news of a US-Iran ceasefire could not be sustained, institutional capital outflow and large investors' bearish bets pushed down the price.

The most direct factor for the decline was cited as outflows from Ethereum spot ETFs. As of April 7, a net outflow of $64.67 million occurred from Ethereum spot ETFs, with Fidelity's FETH leading this trend. In addition, Chinese billionaire Zhang Zhuoer publicly disclosed a short position on Ethereum, citing macroeconomic risks, further stimulating bearish market sentiment. This is interpreted as an indication that institutional investors engaged in profit-taking during the recent rebound.

Internal market supply and demand were also not strong. The altcoin season index fell by 12.82% over the past week, indicating a shift of funds from altcoins to Bitcoin. While the supply side showed tightness, with Ethereum holdings on exchanges decreasing by 77% compared to their 2021 peak, spot buying failed to keep pace, leading to continued supply-demand imbalance.

The critical level in the short-term price trend is the $2,100 mark. Ethereum is currently facing resistance around the 38.2% Fibonacci retracement level near $2,214.5, and below, the $2,100-$2,162 range has been presented as key support. If this range holds, a recovery towards the $2,250 level is possible, but if it breaks, the possibility of retesting the $2,000 mark is open.

The market's attention is now turning to the release of the US Consumer Price Index (CPI). If the CPI results scheduled for April 10-11 come out higher than expected, additional pressure could be placed on risk assets across the board; conversely, if signs of deceleration are confirmed, Ethereum could find some breathing room. Ultimately, in the short term, ETF fund flows, the ability to hold the $2,100 support, and the CPI results are considered key variables that will determine Ethereum's direction.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*