Ethereum Plunges to Two-Week Low Amid Looming $4B Supply Overhang - Here’s What’s Next
Ethereum just hit its lowest point in fourteen days—and a massive $4 billion supply glut threatens to push it even lower.
Market Mechanics Exposed
That mountain of sell pressure isn't just speculative fear. It’s real, quantifiable, and hanging over the market like a crypto Sword of Damocles. Whales are sitting on unrealized losses, exchanges are overflowing with dormant ETH, and leveraged longs are getting liquidated en masse.
Institutional Cold Feet?
Traditional finance’s latest flirtation with crypto appears to be cooling off fast. Funny how a little volatility sends those 'long-term believers' straight back to their bond portfolios.
Where’s The Bottom?
Nobody rings a bell at market bottoms, but everyone hears the crash. Until that $4B overhang clears, expect turbulence—and opportunities. Smart money accumulates when blood's in the streets; dumb money panics. Your move.
De-risking
Investors have “de-risked before Friday's Jackson Hole,” Jake Ostrovskis, Wintermute’s OTC trader, wrote in an X post earlier this week. It comes after a worrying set of economic data releases last week, including Thursday’s Producer Price Index.
U.S. Federal Reserve Chairman Jerome Powell is likely to provide clarity on the highly anticipated September rate cut decision.
Analysts are expecting “a hawkish speech, which is leading to de-risking with a 'known unknown' in the calendar,” Ostrovskis added.
Multiplying the $4 billion unstaking headwind and macroeconomic uncertainty is the worsening network conditions.
Ethereum active addresses interacting with the blockchain fell to nearly 600,000 from a July 30 high of 841,000, representing a 28% decline.
Network Growth, a metric that tracks new addresses joining Ethereum, has also dropped 28% to 138,000 in the same period, suggesting a lack of adoption.
The base case for Ethereum involves a potential consolidation between “$3,900-$4,400” as investors await clarity on ”Fed policy’s changes and tech stocks' performance,” Arthur Azizov, Founder and Investor at B2 Ventures, wrote in an email to Decrypt.
Despite the $4 billion staking unlock, HashKey’s Han believes that the market’s capacity to absorb the supply shock is “strong,” driven by “robust inflows from institutional ETFs and digital asset treasuries.”
Experts who previously spoke to Decrypt acknowledged this short-term uncertainty and continue to remain bullish in the long run, expecting Ethereum to reach $6,000 to $8,000 by the end of the year.
