Ethereum's price has experienced a 2.72% decline today, trading at $3,321.08, as the broader cryptocurrency market faces a significant correction. This downturn is largely attributed to profit-taking following recent gains, particularly after the U.S. election, which saw excessive leverage in the market. According to QCP Capital, "The market had become extremely overbought since the election with excessive leverage, making a pause inevitable." This sentiment is echoed by the broader market's performance, with major cryptocurrencies like Bitcoin and Solana also posting notable losses. Ethereum, while outperforming some of its peers, has not been immune to the sell-off, which has seen the entire crypto market capitalization drop by $182 billion.
The decline in Ethereum's price is also influenced by the end of a five-day streak of net inflows into spot ETFs, with Monday witnessing outflows of $435 million. This shift in market dynamics has led to significant liquidations, with over $691 million wiped out across more than 180,000 positions. Ethereum's recent climb to over $3,500 for the first time since June was short-lived as it got caught in the broader market correction. Despite the current downturn, analysts view this as a healthy correction rather than the start of a prolonged bearish trend.