Ethereum, the second-largest cryptocurrency by market capitalization, experienced a price drop on Boxing Day as the gains from the recent Santa Claus rally were erased. The price of Ethereum (ETH) token fell to $3,340, marking a decrease of over 5.6% from its highest level earlier in the week. This decline coincided with a broader downturn in the crypto industry, with the total market cap of all coins falling to $3.29 million.
The drop in Ethereum’s price occurred in a low-volume trading environment, as many traders remained inactive during the Christmas holiday. Data from CoinGecko revealed that the 24-hour trading volume for Ethereum was $17.5 billion, down from $24 billion the previous day, representing the lowest volume in over a month. Additionally, Ethereum’s futures open interest also decreased, reaching a low of $26 billion from a high of $28 billion earlier in the month, indicating a decline in demand among futures traders.
Despite the negative price movement, there are some positive indicators in the Ethereum market. Data from DeFi Llama showed that the total value locked in Ethereum’s decentralized finance (DeFi) ecosystem increased by 5.50% in the last 30 days, outperforming competitors like Solana and Tron, whose TVL decreased by over 3% in the same period. Furthermore, the active addresses ratio for Ethereum has continued to rise, reaching 0.57%, its highest level since August. This metric looks at the ratio of active addresses to balances with balances, with total active Ethereum addresses surpassing 927,000.
Technical data also revealed that Ethereum’s Market Value to Realized Value (MVRV) score rose by 2.35% in the last 24 hours to 1.64. The MVRV score assesses whether a crypto asset is overvalued or undervalued, with a figure below 3.8 indicating that an asset is relatively undervalued. The price chart analysis for Ethereum showed the formation of a small double-top pattern at $4,095, followed by a bearish breakout and a subsequent rebound to retest the pattern’s neckline at $3,500.
On Christmas day, Ethereum formed a doji candlestick pattern, typically considered a bearish sign, and also exhibited a bearish flag chart pattern. As a result, analysts predict a potential bearish breakout for Ethereum, with the coin likely to reach the psychological support level at $3,000, representing a 10% decline from its current level.
It is important to note that this article does not constitute investment advice, and the content provided is for educational purposes only. Investors are advised to conduct their own research and consult with financial professionals before making any investment decisions.