TLDR
- Ethereum price fell 10% to around $2,200, declining below key support levels of $2,500 and $2,350
- Large investors purchased $274 million worth of ETH through cross-chain bridges in the past 24 hours
- Layer 2 networks Base and Arbitrum led the buying activity during the price decline
- ETH underperformed compared to Bitcoin (up 58.1% year-to-date) and S&P 500 (up 10.4% year-to-date)
- Ethereum stablecoin supply increased by $29.7 million, showing growing network activity
Ethereum experienced a sharp price decline over the past 24 hours, falling 10% as the cryptocurrency dropped below the $2,500 support zone. The second-largest cryptocurrency by market cap traded near $2,200 at press time.
The price decline pushed ETH below several key technical levels. The cryptocurrency broke through the $2,350 and $2,250 support zones before testing the $2,120 area.
Despite the price drop, institutional activity remained strong. Large investors purchased $274 million worth of ETH through cross-chain bridges during the 24-hour period.
Base and Arbitrum, two major Layer 2 scaling solutions, contributed the largest share of this buying activity. The strong inflows suggest institutional investors viewed the price decline as a buying opportunity.
The Ethereum network also saw increased stablecoin deposits. Stablecoin supply rose by $29.7 million over the same period, marking the second-largest increase recorded recently.
This uptick in stablecoin activity reflects growing user engagement on the Ethereum network. The timing of these inflows over the weekend suggests investors may be positioning ahead of Monday’s market open.
Technical Analysis Shows Mixed Signals
From a technical perspective, Ethereum faces resistance at multiple levels. The cryptocurrency is currently trading below the 100-hourly Simple Moving Average.
A key bearish trend line has formed with resistance at $2,280 on the hourly chart. The next resistance level sits at $2,340, which aligns with the 50% Fibonacci retracement level.
If ETH manages to break above $2,400, the price could target the $2,500 resistance zone. A move above $2,500 might open the door for further gains toward $2,550 or $2,620.
However, failure to clear the $2,340 resistance could lead to additional declines. The first major support level is located at $2,150.
Technical indicators show mixed signals. The hourly MACD is gaining momentum in the bearish zone, while the RSI has dropped below the 50 level.
Performance Lags Behind Other Assets
Ethereum’s year-to-date performance has lagged behind other major asset classes. ETH has declined 35% since the start of the year.
This contrasts sharply with Bitcoin, which has gained 58.1% over the same period. The S&P 500 has also outperformed ETH with a 10.4% increase year-to-date.
The underperformance relative to Bitcoin and traditional markets may influence investor sentiment. Some capital could shift toward assets showing stronger momentum.
Bitcoin’s growing reputation as a digital store of value has attracted institutional investment. This trend could continue to benefit Bitcoin at Ethereum’s expense.
The weekend’s $274 million inflow into Ethereum through cross-chain bridges represents the highest liquidity inflow recorded recently, with stablecoin supply increasing by $29.7 million as Layer 2 networks drove the majority of purchasing activity.
