Ethereum has fallen below $2,000, triggering a wave of “buy the dip” sentiment among traders. Analysts warn this premature optimism could indicate more downside is imminent, suggesting the true market bottom arrives only after panic sets in.
Ethereum dropped below the $2,000 level for the first time in nearly two months. This price action pushed traders into “buy the dip” mode according to blockchain analytics firm Santiment.
The firm stated that retail crowds have erupted with calls to buy ETH. Santiment noted that such crowd optimism at a local bottom often means the price has more room to fall.
“There will be an opportunity to buy Ethereum, but ideally you will want to wait for the majority to cool down their FOMO and begin to show panic. This way, you will be buying while there is true blood in the streets,” the firm advised. It argued that buying before panic fully develops precedes the actual floor.
At the time of writing, ETH traded around $1,975. The asset is down nearly 5% over 24 hours and about 8% over seven days.
Data shows about $241 million in ETH positions were liquidated in the past day alone. Long positions made up roughly $228 million of that figure compared to just $13 million in shorts.
The decline occurs amid debate about Ethereum’s future. Bankless co-founder David Hoffman said he had sold his ETH stash.
He expressed uncertainty whether ETH has a strong path toward a major long-term repricing. Hoffman described the Ethereum network as “a giver, not a taker,” beneficial to other assets at the expense of its native token.
