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Ether prices declined below $3,500 on Friday, August 1, reaching their lowest in roughly two weeks as the recent market rally showed signs of exhaustion.
The world’s second-most valuable digital currency by total market value dropped to approximately $3,475.00 around 7 p.m. EST, according to Coinbase figures from TradingView. At this point, it was down more than 10% after rising to approximately $3,940.00 on Monday, July 28.
It was also trading at its lowest point in roughly two weeks, additional Coinbase figures from TradingView reveal.
The digital asset suffered this retracement after rising more than 60% in value, climbing from less than $2,400 earlier in July.
Ether has not been alone in displaying these patterns, as bitcoin climbed above $120,000 last month but suffered a retracement more recently.
Several analysts spoke to these recent price movements, offering some insight on why ether declined over the last several days.
“Ether’s pullback below $3,500 looks like a combination of profit-taking after the recent run-up and a broader cooling in risk appetite,” Joe DiPasquale, CEO of cryptocurrency hedge fund manager BitBull Capital, stated via email.
“Traders had been front-running ETH ETF inflows, but with no major new catalysts this week and equities also pulling back, it’s not surprising to see some retracement,” he added. “Short-term positioning and macro uncertainty are keeping investors cautious here.”
Douro Labs CEO Mike Cahill also spoke to a shift in the markets, stating that they may have become overly warm as of late.
“ETH’s pullback looks like a combination of overheated perp markets cooling off and some rotation into Bitcoin as dominance spikes post-ETF momentum,” he said through email.
“Funding rates were elevated earlier this week, and as that leverage unwinds, you tend to see sharp moves down.”
However, he noted that there is plenty of reason to be bullish about ether’s future prospects.
“But structurally, the bid for Ethereum hasn’t gone anywhere — especially with renewed interest in staking, L2 activity, and institutional experimentation with tokenized assets. If anything, these dips tend to be opportunities rather than signals of a larger breakdown.”
Tom Bruni, editor-in-chief & VP of community at Stocktwits, also offered his views on the matter via emailed commentary.
“Ethereum’s drop below $3,500 isn’t happening in isolation. It’s part of a broader momentum shift in risk assets,” he stated.
“We’re entering a seasonally weak stretch for markets, and after ETH rallied off April’s lows, expectations were running high for all risk assets. But over the last two weeks, even ‘good news’ hasn’t been enough to push prices higher,” Bruni continued.
“With signs of a weakening labor market, no immediate crypto legislation, and the Fed holding rates steady, traders are using this as a reason to de-risk. That pressure will likely persist through August and September,” he stated.
Tim Enneking, managing partner of Psalion, also spoke to maco uncertainty and its potential impact on ether prices.
“Ether had almost doubled in value in five weeks (from $2,117 on June 22 to $3,942 on July 27) without a major retracement,” he noted.
“It was only a matter of time before one occurred, and the poor job numbers from July, combined with another round of Trump tariffs, both caused equities markets to drop significantly and kicked off the inevitable ETH retracement,” said Enneking.
“Continuing in this light, July 27 was ETH’s first serious run at its Dec 2024 ATH (of around $4,100, depending on the exchange), and that attempt was rejected, so markets are now consolidating for another run at it in a few weeks,” he added.
In spite of the recent pullback, ether, and digital currencies in general, are benefiting from some strong bullish factors, claimed Enneking. As a result, the world’s second-largest digital currency could reach a fresh, all-time high in the coming months, he stated.
“There are massive tailwinds behind ETH and digital assets these days, and not just US regulatory trends: Ethereum blockchain improvements, adoption spreading widely, institutions entering the space, ease-of-use enhancements across the board (with, admittedly, a long way to go), etc.,” said Enneking.
“In other words, this drop is clearing out leverage, firming up support above $3k and laying the groundwork for a new ATH, probably later this quarter,” he concluded.
