Ethereum temporarily falls to $2,000 for the first time in 16 months... Hit hard by market correction and whale selling

Investors are concerned after Ethereum (ETH), the "number two coin," temporarily reverted back to $2,000 for the first time in 16 months since November 2023.
All major crypto assets recently fell sharply in the wake of US tariffs, but it is unusual for prices to return to 2023 levels.
This has drawn attention to whether Ethereum can rebound. The $2,000 support line was broken for the first time in 16 months... Why?
At 7:30 a.m. on the 6th, the price of Ethereum on CoinMarketCap was higher than the same time the previous day.
It is trading at $2,227 (approximately JPY 330,000), up 1.97%. However, it briefly fell below $2,000 in the early hours of the previous day, recording a price at the November 2023 level.
First, major crypto assets, including Ethereum, have recently experienced significant declines due to the changing macroeconomic environment caused by U.S. President Donald Trump's tariff measures.
Among them, Ethereum is more affected by the hacking of the large exchange Bybit, as most of the virtual assets seized in the hack were Ethereum and Ethereum-based tokens.
The main reason for the decline is said to be whale selling. According to blockchain data, the supply of Ethereum on centralized exchanges fell to 12
The cryptocurrency hit a month-long high of 16.2 million ETH. The increase in supply on centralized exchanges indicates that selling pressure may increase.
The decline is also attributable to the emergence of other blockchain platforms.
Ethereum is the first blockchain platform that allows the development of decentralized applications (DApps) based on the blockchain.
A blockchain like Ethereum is called a "Layer 1" blockchain, and the base currency of the Ethereum blockchain is the coin Ethereum (ETH).
The more apps are developed based on the Ethereum blockchain and the more actively they are used, the greater the demand for the coin (ETH) and the higher the price will be.
While “Layer 1” competitors like Solana and Avalanche have been around for a while, the past year in particular has been a year of other Layer 1 blockchains emerging.
A typical example is the "meme coin" boom, with most of the meme coins issued last year being based on the Solana blockchain.
The demand for the Ethereum blockchain and Ethereum coins was inevitably reduced. In addition, the recent “Layer 2” blockchain, which emerged to solve the lack of scalability of Ethereum,
Blockchains are also being actively used. Abitram, Optimism, and Base are representative Layer 2 blockchains of Ethereum.
In principle, if Layer 2 blockchains were to emerge, they could help improve Ethereum's lack of scalability.
Layer 2 projects have also begun to issue their own tokens, and there is a trend of increased demand for these tokens over ETH.
Also, Ethereum is moving towards an inflationary model rather than a deflationary model.
The fact that Ethereum is currently using Proof of Stake (PoS) technology is also cited as a reason for the decline.
The final reason for switching to PoS was to create a "deflationary model" by burning fees, but rather, it will be used to reduce the number of tokens provided after April 2024.
The supply was increased by 0.37%, which means it was not carried out as planned. This caused investor confidence to drop. Ethereum needs institutional investor interest and reserve effect to rise again.
As a result, the price has temporarily given up the $2,000 level that had been used as a support line, and it is predicted that the price may fall further to $1,890.
If it breaks through that level, it may fall further. Some say that Ethereum needs institutional interest to bounce back. Currently, there are many Ethereum spot transactions in the United States, Hong Kong, and other countries.
Exchange-traded index funds (ETFs) are being traded, but trading volume and capital inflows have been significantly lacking compared to the Bitcoin spot ETF.
If this trend does not change, a rebound is possible.
Fortunately, institutional interest is gradually increasing. On the 4th (local time), the US Bitcoin spot ETF recorded net outflows, while the Ethereum spot ETF
F turned to a "net inflow" for the first time in nine trading days. The net inflow was about $14 million. In addition, opinions were raised that President Trump's "strategic reserve" positive factors should be more effective.
Previously, President Trump has stated that his strategic reserve fund will include not only Bitcoin, but also Ethereum, XRP, Solana, and Currency.
Stańczak, Executive Director of the Ethereum Foundation, said through X (formerly Twitter) that "As the virtual asset strategy reserve narrative begins, now is the perfect time to demonstrate the strength of the Ethereum ecosystem.
"Ethereum is influencing many areas, including large-scale decentralization, institutional custody solutions, institutional staking, and stable coins," he said.
I tuned it.