A market analyst is anticipating a further drop in Ethereum’s price, falling below $3,000 due to weak support levels, with the asset dropping by 6% in just 24 hours.
On April 2, Ethereum (ETH), the second-largest digital token, dipped below the $3,300 mark for the first time since early March amidst a widespread downturn in the cryptocurrency markets. The overall crypto market cap saw a 4.4% decrease, reaching $2.6 trillion on April 2, according to data from CoinGecko.
Ali Charts, an analyst, warned that if ETH continues to correct below the $3,460 level, it could pose challenges for crypto bulls aiming for higher prices. Referring to data from IntoTheBlock, the analyst highlighted key support levels that Ethereum may consolidate around.
Should this analysis hold true, Ethereum’s price could potentially drop towards $2,850 or even lower. The recent decline in Ethereum’s value has already triggered liquidations exceeding $113 million out of a total of $500 million on that day, with both long and short positions contributing to the losses, particularly affecting long positions, as reported by CoinGlass.
On-chain analytics provider also noted the largest liquidation order was an ETH-denominated position worth $7.5 million on the OKX exchange.
In addition to the price analysis signaling a further decline in Ether prices, a report from Coinbase identified hidden risks within Ethereum’s rapidly expanding restaking sector.
The concept of restaking and liquid restaking gained attention within the DeFi space through Eigenlayer’s initiative in 2021 by Sreeram Kannan, with significant growth in late 2022 through early last year. According to DefiLlama, the protocol has amassed over $12 billion in total value locked, making it the second-largest DeFi protocol at present.
Coinbase analysts, David Duong and David Han, expressed concerns over nontransparent staking strategies associated with Eigenlayer and spinoff protocols like Ether.fi, warning of potential negative financial and security consequences for participants. Nonetheless, they believe that the restaking sector will play a crucial role in Ethereum’s ecosystem infrastructure.
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