Ethereum (ETH) experienced a further decline on Tuesday following a disappointing first-day trading volume for Hong Kong's spot Bitcoin and ETH ETFs. This comes off the back of increased long liquidations and mixed whale activity surrounding the top altcoin.
Read more: Ethereum erases weekend gains as yearlong SEC investigation comes to light
Ethereum’s decline has triggered increased long liquidations in the past 24 hours. Here are key market movers for the largest altcoin:
Grayscale transferred 5,626 $ETH($17.83M) to #FlowTraders 4 hours ago.#Grayscale has transferred $ETH to #FlowTraders 4 times in the past 3 months, totaling 23,178 $ETH($71.3M).https://t.co/SxhLpi2DyY pic.twitter.com/6NLDkUSvDW
— Lookonchain (@lookonchain) April 30, 2024
Glassnode: Ethereum's exchange supply drops faster than Bitcoin's. Investors hoard ETH for the long haul, predicting a bullish surge. Ethereum set to dominate the altcoin rally!
— Kyledoops (@kyledoops) April 30, 2024
Focus on the big picture, not short-term noise. pic.twitter.com/sJMcpx2jP2
Also read: Bitcoin, Ethereum Spot ETF in Hong Kong sees underwhelming response with $12 million in trade volume
Ethereum saw another day of increased decline as prices slipped below the $3,000 key level on Tuesday. Considering the market has been waiting on a price trigger since the week began, the disappointing trading volume of Hong Kong's spot BTC and ETH ETFs caused the sharp decline.
Also read: Ethereum cancels rally expectations as Consensys sues SEC over ETH security status
While short-term price movement indicates more decline, exchange withdrawals from long-term bulls could be a strong support to prevent a decline below the $2,852 key level.
ETH/USDT 4-hour chart
Hence, if ETH fails to break below this level, it may bounce up to fill up recent market inefficiencies. ETH's recovery from this descent could see it break past the $3,300 key level to tackle inefficiencies at the $3,454 level formed on April 12. This thesis may be invalidated if a key macro event significantly affects the crypto market.
Ethereum is a decentralized open-source blockchain with smart contracts functionality. Serving as the basal network for the Ether (ETH) cryptocurrency, it is the second largest crypto and largest altcoin by market capitalization. The Ethereum network is tailored for scalability, programmability, security, and decentralization, attributes that make it popular among developers.
Ethereum uses decentralized blockchain technology, where developers can build and deploy applications that are independent of the central authority. To make this easier, the network has a programming language in place, which helps users create self-executing smart contracts. A smart contract is basically a code that can be verified and allows inter-user transactions.
Staking is a process where investors grow their portfolios by locking their assets for a specified duration instead of selling them. It is used by most blockchains, especially the ones that employ Proof-of-Stake (PoS) mechanism, with users earning rewards as an incentive for committing their tokens. For most long-term cryptocurrency holders, staking is a strategy to make passive income from your assets, putting them to work in exchange for reward generation.
Ethereum transitioned from a Proof-of-Work (PoW) to a Proof-of-Stake (PoS) mechanism in an event christened “The Merge.” The transformation came as the network wanted to achieve more security, cut down on energy consumption by 99.95%, and execute new scaling solutions with a possible threshold of 100,000 transactions per second. With PoS, there are less entry barriers for miners considering the reduced energy demands.