In the early hours of the day, Ethereum’s price briefly dipped below $4,000, marking its lowest point since early August. Around 01:00 (TSI), the largest altcoin was trading at $3,999 before recovering to $4,037. Despite this rebound, Ethereum 
$2,273 experienced a decline of 2.91% over the last 24 hours, as observed through Cryptoappsy data.
Factors Behind Ethereum’s Price Drop
The loss of support at the $4,200 level accelerated selling pressures on Ethereum. BTC Markets analyst Rachael Lucas reported that over $1.7 billion in altcoin liquidations occurred, with $212.9 million attributed to Ethereum.
The U.S. Federal Reserve’s 25 basis point rate cut announcement this month failed to secure the expected upward momentum in the market. Furthermore, Fed Chair Jerome Powell’s comments on not hastily rushing with rate cuts curtailed investor confidence.
The Block’s data revealed that Exchange-Traded Funds (ETFs) also heightened market pressure. In September, there was an influx of only $110 million into spot Ethereum ETFs, a sharp contrast to the over $3.8 billion in August. The reduced inflow into ETFs indicated weakened institutional demand for Ethereum.
Long-Term Investors’ Accumulation Trend
Despite the price drop, on-chain data suggested investors are adopting a different strategy. Over 420,000 ETH were withdrawn from exchanges within the week. CoinW Strategy Director Nassar Achkar noted that the balance of Ethereum on exchanges has hit the lowest point in the past nine years, indicating that investors are transferring millions of dollars worth of ETH into their personal wallets.
According to Achkar, this activity strengthens the inclination to hold long-term, spurred by increased staking yields and institutional confidence. The rapid depletion of exchange supplies introduces the potential for a supply crunch, which could drive prices upward in the future.
