Ethereum in demand as investors buy the dip

Investing.com - Twelve cryptocurrency wallets purchased 156,733 Ethereum from Coinbase (NASDAQ:COIN) in the past few hours, valued at approximately $574 million. This transaction was completed at an average price of $3,664 per Ethereum.

However, despite these purchases, Ethereum's price is struggling amid corrections that have hit the crypto market in general.

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Will Ethereum's price drop by 7%?

According to data from the analysis platform Spot On Chain, 11 out of the 12 cryptocurrency wallets withdrew about 13,059 Ethereum. Notably, one of the wallets – 0xdfa, withdrew a slightly higher amount, 13,084 Ethereum.

Meanwhile, the supply of Ethereum on cryptocurrency exchanges has significantly decreased, reaching its lowest level in seven years, as reported by blockchain data from Glassnode. Lark Davis, an experienced crypto investor, highlighted this trend.

"The supply of Ethereum on exchanges is at its lowest level in 7 years, and as a result, the price of Ethereum could rise significantly."

At the same time, the crypto community is abuzz with the recent approval from the U.S. Securities and Exchange Commission (SEC) for Ethereum ETFs. This development is a crucial advancement for the cryptocurrency market, opening the door for significant potential investments, reflecting the early success seen with Bitcoin ETFs.

Meanwhile, prominent crypto researcher Bobby Banzai predicts monthly inflows of $569 million into Ethereum ETFs. His predictions are based on the performance of international ETFs and futures data from the Chicago Mercantile Exchange.

Despite these positive developments and market optimism, the immediate impact on Ethereum's price has been unfavorable. Following these large purchases, Ethereum's price has dropped by up to 4.91% in the last 24 hours and is currently trading around $3,494.18. Spot On Chain attributed this to the possibility that the transactions from new wallets could be part of over-the-counter (OTC) deals, which do not directly affect the market price. The data analysis platform's forecast indicates cautious short-term expectations for Ethereum, predicting a potential 7% correction from the current market price.

Nevertheless, Ethereum faced challenges this Tuesday, with the digital currency market undergoing a price correction. If this downward trend continues, Ethereum's next support level could be at $3,302.

In the last 24 hours, Bitcoin has dropped by about 3%, BNB has fallen around 7%, and Solana has decreased by approximately 7%.

This article first appeared in Investing.com