TL,DR
- Short-term profit-taking triggers selling pressure.
- Technical failure after not breaking the $4,472 resistance.
- Excessive leverage (over 70% in longs) raises the liquidation risk.
The second largest cryptocurrency by market capitalization, Ethereum (ETH), has experienced a recent downturn, causing concern among investors and traders. While ETH’s long-term outlook remains solidly optimistic, the current weakness is due to a combination of technical factors and short-term market pressures.
One of the fundamental reasons for understanding “why the price of Ethereum is falling” is the intense selling pressure driven by profit-taking Short-term traders, looking to secure their gains after a period of increases, have caused significant capital outflows.
Recent data highlights this behavior. In the last week, a substantial capital migration out of Ethereum was observed, with a notable movement of225 million in a single day, rotating into other assets or simply liquidating positions. This selling behavior reflects a natural pause after strong rallies.
Failure at the Key Resistance of $4,472
From a technical perspective, the price of ETH has failed to sustain a breakout above the critical resistance level of $4,472 (-3.15%). Following multiple unsuccessful attempts to consolidate gains above this mark, the bullish momentum has exhausted, signaling a bearish divergence on the short-term charts
Popular technical indicators like the MACD and KDJ have begun to show signs of exhaustion or weakness, suggesting that the buying power is temporarily fading. This technical failure is a key factor in why the price of Ethereum is falling, as it encourages opportunistic parties (sellers) to take control of the market.
