ETH dips below $4k despite positive fundamentals: check forecast

The cryptocurrency market is having a volatile start to the week, with Bitcoin and Ether experiencing mixed reactions in the last 24 hours.

Ether bounced back to hit the $4,280 mark on Monday but failed to rally higher and has now dropped below $4k.

The mixed performances come despite positive fundamentals from the broader Ethereum ecosystem. 

Stablecoin adoption surges on Ethereum

The Ethereum blockchain has seen an increased adoption of stablecoins over the past 12 months.

According to a report by The Block, the number of unique stablecoin senders per week on Ethereum increased massively during that period. 

The report revealed that from January 2020 to July 2024, there was an average of roughly 400k stablecoin senders on the Ethereum blockchain per week.

Since August 2024, this figure has increased by over 1.7% weekly.

So far this year, there have been an average of 720,000 unique senders on Ethereum per week.

In the last two weeks, this number has surpassed 1 million weekly unique stablecoin senders.

However, US spot Ether exchange-traded funds had a poor start to the week as investors took a cautious approach to the market following the massive liquidation event over the weekend.

Spot Bitcoin and Ether ETFs saw a combined net outflow of $755 million yesterday.

According to SoSoValue data, spot Bitcoin ETFs recorded $326.5 million in outflow on Monday.

Spot Ethereum ETFs recorded even bigger losses, with $428.5 million in net outflow from seven Ethereum ETFs with no inflows.

BlackRock's ETHA accounted for $310 million in net outflows, its second-worst performance since its debut.

The massive net outflow recorded on Monday suggests that institutional investors are pausing and waiting for clearer macro signals before pushing more capital into the market.

At the moment, sentiment is driving activity more than fundamentals. 

ETH could retest the $3,600 low amid bearish PA

The ETH/USD 4-hour chart remains bearish and efficient as Ether has been underperforming in recent days.

The second-largest cryptocurrency by market cap is down 4.5% in the last 24 hours and is now trading at $3,998 per coin.

The bearish performance comes after Ether rallied to the $4,298 level on Monday.

The momentum indicators are still negative, suggesting that buyers have not regained control of the market. 

The RSI of 48 is still below the neutral 50, suggesting that sellers remain largely in control of the market.

The MACD lines are still within the negative zone, indicating a bearish trend.

If the bearish trend persists, ETH could retest the Sunday low of $3,600.

An extended bearish run would see the coin drop towards the $3,300 support level.

However, if the bulls push ETH’s price above the $4,300 region, it could rally higher towards the $4,548 TLQ and psychological level.

An extended rally will see ETH reclaim the $4,800 resistance in the coming days.