Ethereum traders realize nearly $33 million in losses as overheated futures market cools – FXStreet

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Ekta Mourya Ekta Mourya
FXStreet

Ethereum price dipped nearly 7% in the past day as the crypto market corrected on Monday. Bitcoin led the decline by dropping below $40,000, a psychologically important level, for the first time since December 3. 
ETH price, which is correcting to the lowest level in two weeks, could be bottoming out as market participants’ sentiment improves alongside a decline in the altcoin’s funding rate.
Also read: Bitcoin bleeds below $40,000, sign of recovery or concerning dip?
Ethereum’s Network Realized Profit/ Loss (NRPL) metric indicates that ETH traders suffered $32.73 million in losses on Monday. This marks the first time Ethereum traders realized a loss since October 13. 
ETH
Ethereum’s Network Realized Profit/Loss. Source: Santiment
Ethereum price dropped from $2,467 to $2,300 on Monday. The altcoin continued to decline on Tuesday, hitting a low of $2,285. While Ethereum’s price is currently in a downward trend, some on-chain indicators suggest that the altcoin could begin a recovery. 
Two key metrics, Ethereum’s funding rate and weighted sentiment, suggest that ETH price trend could reset. The sentiment among traders, according to data from crypto intelligence tracker Santiment, recovered from its 2024 low of negative 0.89 on Monday to negative 0.75 on Tuesday. 
Meanwhile, the funding rate is considered a key predictor of the Ethereum price trend. If the funding rate declines while the sentiment among traders improves, it indicates there is a cooling-off in the derivatives market. 
Ethereum price could begin its recovery following the completion of the ongoing correction.
ETH funding rate
Ethereum funding rates and price. Source: Coinalyze
ETH
Ethereum weighted sentiment. Source: Santiment 
To the downside, Ethereum price could find support at $2,232, the 50% Fibonacci retracement level of its decline from April 2022 to June 2022. Should the current selling pressure abate at this level, ETH price could reboundand make a recovery to its 2023 peak of $2,446. 
ETH
ETH/USDT 1-day chart
However, a daily candlestick close below $2,232 could invalidate the bullish thesis. If Ethereum price drops further, the bearish imbalance zone between $2,086 and $2,056 could act as the next support zone. 

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Bitcoin price slipped to a low of $38,555 on Binance, early on Tuesday. The crypto market bloodbath saw an increase in selling pressure on BTC, driving prices lower. BTC climbed back above the psychologically important level of $40,000 on Wednesday.
The SEC is attempting to flip one of its biggest losses into some semblance of a victory. This is evident by the most recent filing from the regulatory body against Ripple seeking court intervention over undisclosed document requests.
Immutable X (IMX) price did well across December, with the gaming and metaverse sectors standing out while contending ecosystems struggled. While the project eventually found inflection with holders cashing in, things may change soon.
Sei price has shed 35% in under six days, due to excessive selling pressure. After a liquidity run below the $0.585 swing low, SEI triggered a 13% recovery rally. Going forward, the $0.690 and $0.701 resistance levels will be pivotal in determining the trend going forward.
Bitcoin currently trades around $41,094 after dropping 4.60% on Thursday, putting an end to the $2,000 trading range. This move comes after Adam from GeeksLive noted that the volatility level of BTC dropped to a new low in a month.
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