Ethereum (ETH) Price Prediction: Hits Two-Week Low Ahead of $4 Billion Unlock and Fed Meeting

TLDR

• Ethereum price falls to two-week low of $4,150, down 4.5% from Tuesday’s high of $4,350
• $4 billion worth of staked Ethereum (910,461 ETH) is queued for withdrawal over next 15 days
• Ethereum ETFs see consecutive outflows as investors de-risk ahead of Federal Reserve’s Jackson Hole meeting
• Network activity declines 28% with active addresses dropping from 841,000 to 600,000 since July
• Technical analysis shows potential for further decline to $4,020 support level

Ethereum price has dropped to its lowest price in two weeks as the world’s second-largest cryptocurrency faces pressure from multiple fronts. The digital asset fell 4.5% from Tuesday’s high of $4,350 to $4,150, according to CoinGecko data.

The decline comes as Bitcoin also corrected to $112,000. Both major cryptocurrencies are experiencing selling pressure ahead of key market events.

Ethereum ETFs recorded two consecutive days of outflows late last week and on Monday. This follows two weeks of strong inflows, suggesting investor interest is cooling.

The timing aligns with the Federal Reserve’s Jackson Hole meeting scheduled for Friday. Investors are awaiting Fed Chairman Jerome Powell’s comments on the September rate cut decision.

Major Supply Unlock Creates Pressure

The current exit queue on Ethereum’s Proof-of-Stake network stands at 910,461 ETH. This represents approximately $3.91 billion worth of staked tokens waiting to be withdrawn.

Data from the Validator Queue shows a 15-day waiting period for this supply to become available. Once unstaked, this Ethereum will likely enter the open market.

Xu Han from HashKey Capital explained that the record-high exit queue stems from profit-taking. Many participants want to lock in gains with Ethereum trading near its 2021 all-time high of around $4,900.

The recent spike in Ethereum borrowing rates on Aave has made leveraged staking trades less profitable. This trading strategy involves borrowing Ethereum to stake via liquid staking tokens.

Higher borrowing costs have forced traders to unwind positions and repay loans by unstaking their Ethereum. This adds to the selling pressure.

In contrast to the $3.91 billion exit demand, new Ethereum staking demand stands at only 258,951 ETH. This equals roughly $1.09 billion, well below the exit demand.

Ethereum Price Prediction

Ethereum’s network metrics reveal declining user engagement. Active addresses interacting with the blockchain fell to nearly 600,000 from a July 30 high of 841,000.

This represents a 28% decline in network activity over recent weeks. The drop suggests reduced adoption and usage of the Ethereum network.

Network Growth, which tracks new addresses joining Ethereum, also dropped 28% to 138,000 in the same period. Both metrics point to weakening fundamental demand.

Technical analysis shows Ethereum trading below key support levels. The price now sits below $4,250 and the 100-hourly Simple Moving Average.

Initial resistance appears near the $4,185 level, with major resistance at $4,350. A bearish trend line is forming with resistance at the same $4,350 level.

If Ethereum fails to reclaim $4,320 resistance, further downside could target $4,020 support. Technical indicators including the hourly MACD and RSI show bearish momentum.

Despite short-term headwinds, some experts remain optimistic about Ethereum’s longer-term prospects. HashKey’s Han believes the market can absorb the supply shock due to institutional ETF inflows.

The current supply unlock represents the largest validator exit queue in Ethereum’s history as stakers look to capitalize on recent price gains.

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