 Why is Ethereum (ETH) price down today?  
2024-10-02

Ether (ETH) price suffered a significant correction over the past 24 hours due to heightened tensions in the Middle East.
The entire cryptocurrency market fell along with other risk-on assets like US equities. Jesse Colombo, a markets analyst and investor, emphasizes the above, stating, 
ETH faces largest liquidation event since Aug. 5
Ether’s 6% drop triggered its largest liquidation since that “black Monday” on Aug. 5, when Ethereum witnessed massive liquidations of over $200 million.
Data from CoinGlass indicates that over $100 million in positions were liquidated during the latest drop, with $98 million representing long positions. 
A high liquidation event can forcefully close long positions, putting further pressure on price if spot bids do not absorb the sell-off.
High correlation of stocks and BTC, ETH continues
Despite most cryptocurrencies dropping alongside in the past 24 hours, some, like SEI, SUI, and INJ, have already rebounded by more than 5%, recouping more than 50% of their recent correction.
However, Ether remains under $2,500, and this is largely because it remains in lockstep with with Bitcoin. As highlighted below, the 90-day rolling correlation index between Ether and Bitcoin is 0.82, which is higher than any other pair of crypto assets. 
Additionally, Ether also shares a high correlation with US equities such as S&P 500 (SPX) and Dow Jones (DJI), which witnessed minor corrections after the Iran-Israeli conflict flared up. 
The chart below illustrates a correlation coefficient of 0.87 and 0.83 between ETH-SPX and ETH-DJI, respectively. 
Ether price moves into the “golden zone”
Despite Ethereum’s current woes, the current price may catch the attention of high-time-frame (HTF) swing traders. From a technical perspective, ETHUSD made a bullish break of structure (BOS) on Sept. 13, when the price moved above a descending trendline, as illustrated in the chart. 
After BOS, the price moved aggressively toward $2,728, and ETH consolidated for a bit before the latest drop. Now, Ether is back in the golden zone, which is between 0.5 and 0.618 Fibonacci retracement lines. 
During an uptrend, the golden zone is considered an opportunity range for HTF swing traders who are looking to enter a position at a higher low (HL) mark before the asset (ETH in this case) facilitates a higher high (HH), which will be above $2,728 in the coming weeks. 
Therefore, if Ether resumes its rally in the coming weeks, traders could consider current price levels an opportunity to build long positions.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.