Ether (ETH), Ethereum’s native currency, has lost over half its value in dollars since 2022. Also steadily declining over Bitcoin (BTC), and Ethereum Price is presently stuck below $2,000 for a number of reasons.
Furthermore, due to a lot of different things that are mentioned below, the ETH price might drop even more in June.
$250 Million Withdrawn From Ethereum Based Funds
According to CoinShares’ weekly market survey released May 31, investors withdrew $250 million from Ethereum-based investment funds in 2022.
In comparison with other coins, the huge outflow stands out. In 2022, for example, investors spent $369 million towards Bitcoin-based financial products.
Conversely, layer-one blockchain technologies Solana and Cardano, which challenge Ethereum, have raised $104 million and $9 million, respectively.
Withdrawals from Ethereum investments are an indication of how the recent meltdown in TerraUSD (UST) and Terra (LUNA) has impacted confidence in the larger DeFi sector.
Ethereum’s blockchain holds the bulk of financial applications in the industry. On the other hand, ETH’s optimistic prospects remain attached with expectations of DeFi market surge. The total value locked (TVL) within Ethereum-based apps was $68.71 million as of June 5. This accounts for about 65% of the entire DeFi TVL.
Meanwhile, the TVL represents a major pullback from Ethereum’s DeFi pools. This was fluttering above $100 billion until the fall of Luna Classic (LUNC) and TerraUSD Classic (USTC) on May 9.
According to Ilan Solot, a partner at Tagus Capital, macro issues driven by the Federal Reserve’s hawkish policies, along with a careful perspective around the DeFi sector. Ether appears to continue its slide in June.
Ethereum Price Enters Descending Triangle
Trading activity since May has also painted a negative picture for Ethereum. Ether is already swinging within a range defined by a downtrend resistance and horizontal trendline support. The pattern resembles a “descending triangle,” a bearish extension trend.
Falling triangles, based on technical analysis rules, settle when the price breaks strongly below its support trendline and subsequently descends to the triangle’s height limit. In June, Ether may have a similar downward trend, as illustrated in the chart below.
If the price of ETH falls under the triangle’s bottom trendline, it might drop below $1,350 in June. This will see a drop of nearly 25% from today’s price.
Exchanges See An Increased Ether Balances
According to CryptoQuant statistics, the overall Ether balances on crypto exchanges have climbed by 550,459 ETH until May. Since the start of the Terra incident, about $950 million has been deposited into the exchanges’ hot wallets.
Traders often transmit tokens to exchanges while trading them for other assets. As a result, if the downward trend in ETH reserves on exchanges starts to turn around, selling pressure will certainly intensify.
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