- Ethereum drops to $340, a 28% decrease from its 2020 high of $480
- Ethereum was rejected at key resistance levels even before Bitcoin did a pullback
- The waning hype on decentralized finance is affecting Ethereum
As the price of Ethereum pulls away from $480, analysts are now more bearish, citing a target of $250 if market trends do not change.
Ethereum opened Monday at $371 and closed at $340, a move that erased whatever was gained in the last fifteen days. The second largest cryptocurrency is also currently down 28% from its 2020 high of $475. Analysts point to the exhaustion of the momentum of decentralized finance (DeFi) and technical rejection as key factors to the decline.
According to Cointelegraph, Ethereum was already rejected at a key resistance level even before Bitcoin’s very own pullback. In the last fifteen days, Ethereum could not even break past $390 to hit $400. The final rejection happened on Sept. 20, followed by a violent decline in the price two days later.
Cointelegraph contributor and full time trader, Michael van de Poppe, said that level was a multi-year resistance area thus the selling pressure got heavy. The trader is now eyeing a lower level to place his longs.
“If we get to $280 and/or $250, I’d be happily looking for longs,” van de Poppe continued.
According to a trader who goes by the name of “Cred”, the weekly time frame still looks bearish for Ethereum. In comparison, Bitcoin is looking better on the weekly chart even if it is pulling from the daily resistance.
The hype around DeFi appeared to have subsided at the moment as most DeFi coins are currently down significantly from their all-time highs. According to research Larry Cermak from The Block, most are down 40%, including SushiSwao, Cream, YFI, and Uniswap. YFI made headlines in August after hitting an all-time high of $43,678, which was more than half of Bitcoin’s all-time high price it reached in 2017.
On the other hand, automated market maker Uniswap launched an airdrop of at least 400 UNI to its users, which then clogged the Ethereum network as many rushed to convert the token back to ETH or buy more.
Because the positive sentiment around DeFi affected Ethereum, the second largest cryptocurrency benefited from the DeFi craze. However, as DeFi started to pull back, it also placed more selling pressure on Ethereum.