Ether Price Decline

Ether fell 7.9% over the past 24 hours, with the overall crypto market down 3.45%, as investors continue to weigh the impact of Mt. Gox’s latest transfers and macro developments.

Ether was changing hands at around $3,166 at the time of writing, down 7.9% in the last 24 hours, according to The Block’s price page. Bitcoin BTC (+5.15%) dropped 2.52% to trade at $64,200 at the time of writing.

“The pronounced pullback… is not only unsurprising but expected,” said Justin d’Anethan, head of APAC business development of crypto market maker Keyrock, to The Block. “The market’s memory is short but, while the spot bitcoin ETFs did push prices higher initially, crypto markets went down.”

“Many speculators unwind their trade,” d’Anethan added. “This is all too common: buy the rumor, sell the news. The enthusiasm that the ETH (+3.44%) spot ETF applications fomented, along with the approval and now with the actual trading, led to a healthy ramp-up where people are essentially trying to front-run the event. Once the narrative has fully played out, it’s time to take profit and move on to the next trade.”

Min Jung, an analyst of Presto Research, noted that the price movement appears to be a typical “sell-the-news” event, common in the crypto market. “Additionally, this sell-off coincided with the news that Bitstamp has received Mt. Gox assets and will distribute them to creditors. Furthermore, the S&P 500 and Nasdaq both fell over 3.5%, marking the worst day since 2022 due to disappointing earnings from tech companies, which may have added pressure on the crypto market,” Jung added.

The U.S. stock market registered multi-week lows on Wednesday. The Nasdaq Composite index closed down 3.6%, marking its worst day since October 2022, while the S&P 500 index fell 2.3%, experiencing its worst day since December 2022.

Bitstamp announced on Wednesday that it has begun the process of returning digital assets to Mt. Gox creditors, having received bitcoin, bitcoin cash, and Ethereum from the Mt. Gox trustees. It plans to start distributing the crypto assets to Bitstamp customers beginning Thursday, July 25.

Nick Ruck, head of growth of BitU Protocol, mentioned that traders may perceive the market as overheated, leading to falling stock and crypto prices. “Due to the rapid volatility of these prices, many traders may take some profit until conditions become more stable,” Ruck added.

“Despite the price drop of ETH, we expect the drop to be temporary when market sentiment improves and the ETH price rallies in the mid-long term,” said Lucy Hu, senior analyst of Metalpha.

“The aftermath of the ETH spot ETF launch has led to short-term volatility, mirroring patterns observed after the Bitcoin ETF launch and the recent sell-off in broader technology assets,” said Vivien Wong, partner at HashKey Capital. “This initial volatility suggests that the market is in a phase of adjustment, trying to stabilize after the surprising price-in reaction to the pre-ETH ETF launch announcement in May.”

Update: Added comments from analysts