Ethereum, the world’s second-largest cryptocurrency by market capitalization, has been hit hard in a recent market upheaval, experiencing a dramatic 23% drop in less than 24 hours. This significant decline has come despite recent optimism surrounding the introduction of America’s first spot Ethereum exchange-traded funds (ETFs).

Ethereum’s Sharp Decline

On Sunday evening, Ethereum’s price stood around $2,900. However, by Monday morning during the Asian trading session, it had plummeted to as low as $2,240. This drop represents the lowest Ethereum has seen since early January 2024 and positions it as the worst-performing asset among the top 15 cryptocurrencies by market cap.

Market Crash Details

In the past week, Ethereum has lost 30% of its value, and the asset is now down more than 50% from its all-time high. At the time of writing, Ethereum had somewhat recovered, trading at around $2,300 as the market’s descent appeared to slow.

Massive Liquidations Contribute to the Crash

According to Coinglass, the cryptocurrency market has faced severe liquidations over the past 12 hours, with $676 million worth of positions being liquidated. The majority of these liquidations have involved long positions in Ethereum.

The recent market chaos has been partially attributed to significant sell-offs by Jump Crypto. The trading firm has unloaded hundreds of millions of dollars in assets in recent days. Specifically, Jump Trading sold 120,695 Wrapped Staked Ethereum (wstETH) worth approximately $481 million and had offloaded 83,000 wstETH, valued at $377 million, since July 24. The remaining 37,604 wstETH is now valued at around $104 million.

Jump Crypto’s Exit and Market Reactions

Jump Crypto’s exit from the crypto space has ignited a mixed reaction within the industry. Ethereum advocate Anthony Sassano suggested that the firm’s departure might be beneficial in the long run. Sassano argued that Jump Crypto’s exit could be seen as a positive shift, indicating a potential cleanup of the crypto ecosystem.

Broader Market Influences

The current market turbulence is also linked to broader economic factors. Weak economic data from both the United States and Asia, coupled with a significant sell-off in big tech stocks following disappointing revenue reports, has exacerbated the market’s instability.

Analyst and trader Rekt Capital noted that the recent drop in the Bitcoin’s price might signal a very potential slowdown in the market’s decline. The Bitcoin CME gap has now been filled, which could imply a very stabilization point. Bitcoin fell to $52,600 during Monday’s Asian trading session and marking its lowest level since late February. Bitcoin has corrected 27% from its mid-March all-time high.

Overall Market Impact

This weekend’s market crash is one of the most severe since the Terra/Luna collapse of the mid-2022. Over the past week, more than half a trillion dollars has exited the crypto market, causing a 22% drop in total market capitalization. Despite these severe losses, the market’s decline appears ongoing.

Conclusion

The sharp 23% drop in Ethereum’s price underscores the extreme volatility currently affecting the cryptocurrency market. Institutional sell-offs, economic uncertainties, and broader market factors have all contributed to this significant downturn. As the market continues to experience turbulence and investors and analysts will need to closely monitor developments to navigate this challenging environment.