- Ether prices dropped over 6% on October 7 after recent market gains.
- Profit-taking among traders contributed to the decline in ether and other major cryptocurrencies.
- A $4 billion movement from a dormant Bitcoin wallet affected crypto markets, including ether.
- Futures market data show decreased open interest, highlighting further profit-taking activity.
- Analysts expect ether to remain range-bound between $3,800 and $4,900 for the near term.
Ether, the second-largest cryptocurrency by market value, saw its price fall more than 6% on October 7 as traders sold to secure recent profits. The digital currency dropped to about $4,450 after peaking above $4,750, according to Coinbase data from TradingView.
This decline followed about ten days of steady gains for ether, which rose over 20% since September 25. Most top cryptocurrencies suffered losses on the same day, according to CoinMarketCap.
Tom Bruni, head of markets & retail investor insights at Stocktwits, said the drop was mainly driven by profit-taking after the recent rally. “Today’s pullback in Ethereum and the crypto market is primarily a reflection of profit-taking following roughly 10 days of strong gains across the board,” Bruni stated in an email. Bruni also noted similar patterns in traditional stock markets, with indexes hitting new highs but struggling to maintain momentum.
Tim Enneking, managing partner of Psalion, attributed the decline to profit-taking across all major digital assets. “After the tremendous move up pretty much across the board, all major digital assets retraced a bit today,” Enneking said. He expects short-term stability and a possible return to new highs for bitcoin.
Brian Huang, cofounder of Glider, highlighted a major movement of bitcoin worth $4 billion from a dormant wallet. This post on X referenced the transaction. Huang explained, “A move from a dormant wallet is usually a sign of selling and taking profit. The timing lines up with fresh BTC highs this week as well—a good time to sell. The move in BTC had Ripple effects across the broader ecosystem which has affected ETH.”
Julio Moreno, head of research at CryptoQuant, said much of the ether drop came from profit-taking in the futures market, where traders place bets on future prices. He pointed to a $1.7 billion decline in open interest for ether futures in the last 24 hours, noting this reflected traders closing out long positions as prices fell.
Bruni also commented that retail traders appeared hesitant to buy at current highs ahead of the next earnings season. He said that while most broad risks had been absorbed by markets, earnings remained a key variable for investors.
Currently, analysts see ether trading between $3,800 and $4,900. Bruni said, “For now, traders are buying dips toward the bottom of the range and selling peaks toward the top, waiting for the eventual move above 5,000 to signal that the next leg of this altcoin rally has begun.”
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