On Thursday, Ethereum (ETH) saw a significant price drop, declining over 7% and nearing the $2,400 mark.
However, market analysts suggest a potential bullish trend is on the horizon for the second-largest cryptocurrency. Lark Davis, a market analyst, shared insights on social media platform X, indicating an impending breakout for ETH based on on-chain metrics and market behaviors.
Ethereum has outperformed Bitcoin (BTC) in the second quarter, signaling growing investor confidence. The recent Pectra upgrade has enhanced Ethereum's scalability and reduced its inflation rate, making it more appealing to investors.
Exchange balances hitting seven-year lows and substantial inflows into Ethereum exchange-traded funds (ETFs) suggest larger investors are accumulating ETH for the long term. Despite these positive indicators, betting markets on Polymarket give only a 27% chance of Ethereum reaching a new all-time high by 2025.
The broader cryptocurrency market also faced challenges on Thursday, with total market capitalization dropping from $3.30 trillion to approximately $3.12 trillion. Bitcoin, XRP, and Solana (SOL) experienced losses, retracing by 3%, 5%, and 6%, respectively.
Tensions between US President Donald Trump and Elon Musk added to the day's market volatility. This public dispute has drawn attention to the intersection of US politics and cryptocurrency.
Income Sharks noted the swift impact of political conflicts on crypto markets, emphasizing that the Ethereum price has not yet lost critical support levels. The analyst identified the $2,390 mark as a crucial support point for the altcoin, which could determine the next upward targets of $3,000 and $4,000.
Trading at $2,406 when writing, Ethereum is well below its all-time high reached in 2021. The altcoin is currently 50% below its record of $4,878, according to CoinGecko data.