Why did the price of Ethereum drop today?

There are several reasons that caused the price of Ethereum to drop by about 4% and reach $2575 today.

The entire cryptocurrency market was moving in the same direction and dropped by about 2.4%.

First, many people closed long positions they had opened on Ethereum ("Long Liquidations"), which caused the price to drop.

Also, some people started to exit the market, which reduced the amount of money being traded ("Open Interest").

Secondly, the Relative Strength Index (RSI) reached a very high level ("Overbought"), which means that people who bought a long time ago started to sell to realize profits.

Additionally, there is strong resistance at the price levels of $2600 and $2800, which prevented the price from dropping further.

A well-known analyst says that Ethereum needs to surpass this resistance level to reach higher numbers in 2025. If this happens, the entire altcoin market could improve.

In the short term, the price of Ethereum could drop to a level between $2100 and $2230, which could be a good opportunity for those still looking to buy.

Moreover, Ethereum's market share in the cryptocurrency market reached its highest level since May 2021, which is typically an indicator that a significant price drop could occur.

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