- Ethereum traders realized $32.73 million in losses during the crypto market correction on Monday.
- ETH funding rate declined alongside Ethereum's price drop of nearly 7%.
- Sentiment among traders improved, increasing the chances of a recovery in the altcoin's price.
Ethereum price dipped nearly 7% in the past day as the crypto market corrected on Monday. Bitcoin led the decline by dropping below $40,000, a psychologically important level, for the first time since December 3.
ETH price, which is correcting to the lowest level in two weeks, could be bottoming out as market participants’ sentiment improves alongside a decline in the altcoin’s funding rate.
Also read: Bitcoin bleeds below $40,000, sign of recovery or concerning dip?
Ethereum traders hit by $32.73 million losses in single day
Ethereum’s Network Realized Profit/ Loss (NRPL) metric indicates that ETH traders suffered $32.73 million in losses on Monday. This marks the first time Ethereum traders realized a loss since October 13.
 [14.02.55, 23 Jan, 2024]-638416031304950842.png)
Ethereum’s Network Realized Profit/Loss. Source: Santiment
Ethereum price dropped from $2,467 to $2,300 on Monday. The altcoin continued to decline on Tuesday, hitting a low of $2,285. While Ethereum’s price is currently in a downward trend, some on-chain indicators suggest that the altcoin could begin a recovery.
Two key metrics, Ethereum’s funding rate and weighted sentiment, suggest that ETH price trend could reset. The sentiment among traders, according to data from crypto intelligence tracker Santiment, recovered from its 2024 low of negative 0.89 on Monday to negative 0.75 on Tuesday.
Meanwhile, the funding rate is considered a key predictor of the Ethereum price trend. If the funding rate declines while the sentiment among traders improves, it indicates there is a cooling-off in the derivatives market.
Ethereum price could begin its recovery following the completion of the ongoing correction.
Ethereum funding rates and price. Source: Coinalyze
 [14.12.47, 23 Jan, 2024]-638416031901661945.png)
Ethereum weighted sentiment. Source: Santiment
To the downside, Ethereum price could find support at $2,232, the 50% Fibonacci retracement level of its decline from April 2022 to June 2022. Should the current selling pressure abate at this level, ETH price could reboundand make a recovery to its 2023 peak of $2,446.
ETH/USDT 1-day chart
However, a daily candlestick close below $2,232 could invalidate the bullish thesis. If Ethereum price drops further, the bearish imbalance zone between $2,086 and $2,056 could act as the next support zone.
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