Ether Prices Decline

Ether prices fell below $3,500 on August 1, hitting their lowest in about two weeks, as the recent market rally showed signs of exhaustion.

The world’s second-most valuable digital currency by market value sank to approximately $3,475.00 around 7 p.m. EST, according to Coinbase figures from TradingView, marking a decline of over 10% from its peak of around $3,940.00 on July 28. This drop also represented the lowest point for ether in roughly two weeks.

Ether’s decline follows a significant increase of over 60% in value, having risen from below $2,400 earlier in July. It wasn’t the only asset affected; Bitcoin also experienced a retracement after climbing above $120,000 last month.

Analysts Weigh In

Analysts provided insights into the reasons behind ether’s recent price movements. Joe DiPasquale, CEO of BitBull Capital, noted that the drop below $3,500 could result from profit-taking after the earlier run-up and a cooling risk appetite. He emphasized that the lack of major new catalysts and pullbacks in equities contributed to the retracement. DiPasquale remarked, “Short-term positioning and macro uncertainty are keeping investors cautious here.”

Mike Cahill, CEO of Douro Labs, suggested that markets may have overheated, indicating a mixture of cooling perp markets and a rotation towards Bitcoin. He added, “Funding rates were elevated earlier this week, and as that leverage unwinds, you tend to see sharp moves down.”

Despite the pullback, Cahill expressed a bullish outlook on ether’s prospects, citing ongoing interest in staking, L2 activity, and institutional experimentation.

Tom Bruni, VP of Community at Stocktwits, pointed out that Ethereum’s drop wasn’t isolated but part of a wider momentum shift in risk assets. He mentioned that expectations were high following ETH’s rally since April, and even good news wasn’t sufficient to push prices higher recently.

Tim Enneking, managing partner of Psalion, expressed that ether had nearly doubled in just five weeks, making a retracement inevitable. Poor job numbers in July and new tariffs contributed to market declines and ether’s subsequent drop.

‘Massive Tailwinds’

Despite the recent dip, Enneking highlighted strong bullish factors supporting ether and digital currencies. He asserted that Ethereum could reach a new all-time high soon, citing improvements in the blockchain, widespread adoption, institutional interest, and enhancements in ease-of-use.

He concluded, “This drop is clearing out leverage, firming up support above $3,000, and laying the groundwork for a new ATH, probably later this quarter.”