The Ethereum (ETH) price experienced a significant decline on Thursday, falling over 7% and approaching the $2,400 mark. However, expert analysis suggests that a new bullish trend may soon emerge for the second-largest cryptocurrency.
Key Metrics Indicate Accumulation By Larger Investors
Market analyst Lark Davis took to social media platform X (formerly Twitter) to share insights on Ethereum’s potential. He noted that various on-chain metrics and market behaviors indicate an impending breakout for the ETH price.
Notably, Ethereum has been outperforming Bitcoin (BTC) in the second quarter of the year, suggesting growing investor confidence. The recent Pectra upgrade has improved Ethereum’s scalability and reduced its inflation rate, making it more attractive to investors.
Additionally, the expert highlights that with exchange balances hitting seven-year lows and substantial inflows into Ethereum exchange-traded funds (ETFs), it appears that larger investors are accumulating ETH for the long term.
Despite these bullish indicators, Davis cautioned that not all market participants share this optimistic outlook. Betting markets on Polymarket currently assign only a 27% chance that Ethereum will reach a new all-time high by 2025.
Critical Support For Ethereum Amid Political Disputes
The broader cryptocurrency market also faced challenges on Thursday, with total market capitalization dropping from $3.30 trillion to approximately $3.12 trillion. Bitcoin, XRP, and Solana (SOL) were among the notable cryptocurrencies experiencing losses, retracing by 3%, 5%, and 6%, respectively.
In a separate but related development, tensions between US President Donald Trump and his former adviser Elon Musk have surfaced, adding to the day’s market volatility.
Trump expressed disappointment over Musk’s criticism of a key tax and spending bill from his administration, suggesting that their “great relationship” may be nearing its end. Musk retaliated by accusing Trump of ingratitude, claiming his support was instrumental in Trump’s election victory.
This public dispute has drawn attention to the intersection of US politics and cryptocurrency, a dynamic that market analyst Income Sharks noted in a recent post on Elon Musk’s social media site, X.
The analyst remarked on the swift impact of political conflicts on crypto markets, emphasizing that the Ethereum price has not yet lost critical support levels.
Income Sharks, in his analysis, identified the $2,390 mark as a crucial support point for the altcoin in the immediate term, which could determine the next upward targets of $3,000 and $4,000.
While trading at $2,406 when writing, Ethereum finds itself well below its all-time high reached during the market’s last bullish cycle in 2021. As of now, the altcoin stands 50% below its record of $4,878, according to CoinGecko data.
Featured image from DALL-E, chart from TradingView.com