Why is Ethereum (ETH) price down today?

Ether (ETH) price is down by 8% on March 19 and the recent price correction comes amid reduced activity on the Ethereum network. Since Ether’s price hit $4,000 for the first time since 2021 on March 8, the second-largest cryptocurrency by market capitalization has continued to drop lower.

Ether price index, USD. Source: TradingView

Let’s investigate the reasons why Ether price is down today.

Futures liquidations send Ether price lower

Ether’s price decline has led to a rush of liquidations across the derivatives market. Bullish traders were caught off guard, leading to a quick spat of long liquidations.

In the past 24 hours, over $110.6 million in Ether long positions have been liquidated, with $77 million being wiped out in the previous 12 hours. The large amount of long liquidations has traders eying the $3,100 price level. If Ether’s price hits that level, $212 million of leveraged long positions are at risk for liquidation.

Ether liquidations. Source: Coinglass

Ether price is negatively affected when long derivative positions are liquidated without buying pressure from trading volume.

Related: The DeFi bots pumping Solana’s stablecoin volume

Ethereum volume and TVL waiver

Ether price fell, coinciding with the plummeting of Ethereum network volume. Ethereum volume has fallen 6.15% for the week of March 19. The drop in network volume comes after the highly anticipated Decun upgrade on March 15.

Correlating with the volume drop-off, Ethereum network’s total value locked (TVL) dropped 8.5% in 24 hours on March 19. Current Ether TVL of $47.9 billion is over $60 billion less than the all-time high, which was set on Nov. 8, 2021.

Ethereum TVL and volume. Source: DefiLlama

The major decrease in volume comes as Solana (SOL) gains momentum amid the memecoin craze.

Related: The Fed’s BTFP program is officially over — Will Bitcoin price take another blow?

ETH traders’ confidence wanes

Market analysts are showing pessimistic perspectives in regard to Ether’s shorter and medium-term price performance. Market Prophit highlighted that both the crowd and smart money cohorts have bearish sentiments in regard to…

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