The price of Ethereum (CRYPTO:ETH) has fallen more than 30% in Q3 2024, marking its worst performance in five years.
Which happened
According to CriptoNoticias, the price of ETH has fallen below $3,000 since “Black Monday” in early August. Factors such as rumors of a US recession, the end of the Japanese yen carry trade, and geopolitical tensions have contributed to this fall.
The data of Coinglass show that ETH has had a negative return of over 30% between July and September, surpassing the 13.64% drop of the same period in 2023. In 2019, ETH also suffered a significant drop of 37.43%.
The launch of ETH-based ETFs in the US has not boosted the asset’s price. According to SosoValuethese instruments have seen capital outflows of more than $590 million since July.
A report by CryptoQuant suggests that the update of Dencunwhich introduced temporary data storage on Ethereum’s second layers, has reduced demand for ETH, affecting its price.
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Why is it important?
Ethereum’s price decline in Q3 2024 comes amid growing global economic uncertainty. This decline highlights the asset’s sensitivity to macroeconomic factors, such as recession fears and geopolitical tensions.
However, there is a chance of recovery if the Federal Reserve decides to reduce interest rates at its next meeting on September 18. This move could be a positive catalyst for Ethereum, boosting its price and especially benefiting the decentralized finance (DeFi) ecosystem, where Ethereum plays a central role.
With more than 10 days remaining in the quarter, markets remain on the lookout for this potential monetary policy shift, which could revive demand for ETH and counter current bearish pressures.
Photo: Shutterstock
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