Ethereum Price Falls Below $4,000 Amid Multiple Market Factors
Ethereum (ETH) has dropped below $4,000 for the first time since August 8. This decline results from several factors:
- A strong US dollar and cautious Federal Reserve stance reduced risk appetite.
- Rising bond yields and potential US government shutdown deterred investment in riskier assets like cryptocurrencies.
- On September 22, over $500 million in ETH longs were liquidated, causing leverage to unwind.
- Low weekend trading volume and shallow order books increased price volatility.
- Institutional investors opted for OTC redemptions post-Fed meeting, reducing ETH exposure.
- Technical failure to break resistance at $4,500-$4,600, and inability to maintain $4,200 support led to bearish momentum.
- Regulatory uncertainty, especially regarding MiCA in the EU and US crypto laws, affected sentiment.
- Validator exit queues and decreased staking inflows weakened buy-side support.
- Seasonal trends and Bitcoin's (BTC) market dominance contributed to the sell-off.
While some analysts foresee a recovery, with potential targets of $5,000 to $6,800 by the end of 2025, others suggest the increase in global M2 money supply could push ETH to $20,000. Currently, ETH trades at $3,959, down 3.6% in the last 24 hours.
