Ethereum price drops to $2.6K, but analysts predict the end of correction soon as market indicators show signs of recovery.
Ethereum (ETH) price has taken a sharp tumble, recently hitting $2,664 as of August 19, 2024, marking a 21.30% decline since late July, according to CoinMarketCap. However, analysts now suggest that this correction may be entering its final stages, with key on-chain metrics hinting at a potential recovery.
CryptoQuant analyst Burak Kesmeci notes that Ether’s taker-buy ratio is turning positive again, indicating that buyers are beginning to regain strength. This ratio measures the balance between buyers and sellers across major crypto exchanges, and a positive reading suggests buying interest is returning.
Interestingly, CoinGlass data reflects a similar trend. Over the last 24 hours, short-sellers held a slight edge, but in the most recent 12-hour window, there were a total of $49.84 million liquidations with $6.91 million long liquidation and $42.94 million short liquidations, signaling increased bullish sentiment.
Ethereum Correction May Be Nearing Its End
At the same time, Open Interest (OI) in Ethereum futures — a key indicator tracking the number of active contracts — jumped 10% to $10.69 billion on August 19. This uptick suggests renewed trader activity, which Kesmeci believes could drive significant upward movement if leveraged players re-enter the market.
Historically, spikes in Ether’s OI have signaled critical market shifts. For example, in March 2024, when Ether reached its yearly peak of $4,066, OI hit $13.67 billion. A similar spike to over $15 billion was seen when Ether retested the $3,800 mark in June, shortly before a sharp correction followed.
Kesmeci emphasizes that these patterns indicate we could be nearing the end of the current downturn. He stated:
“This indicated a market correction was likely, and indeed, the correction occurred.”
ETF Launch Fails to Lift Ether, Adds to Pressure
Ether’s first spot exchange-traded funds (ETFs) launched on July 23 with high expectations, but price movement has been disappointing. In the past 28 days, U.S.-based ETH ETFs have seen outflows of $434 million, increasing selling pressure. This situation is similar to what happened with Bitcoin ETFs, which experienced a 15% drop after their launch but later recovered.
While Ether’s dip below $2.6K has raised concerns, a combination of strengthening on-chain metrics and renewed trader confidence suggests that this correction may be winding down. Investors are watching closely to see if leveraged traders return to the scene, potentially paving the way for a recovery.
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