Ethereum prices fell below the $4,000 threshold for the first time since early August during Thursday morning trading sessions.

Price data shows the cryptocurrency was trading at approximately $3,999 around 1 AM Thursday morning. Prices have since recovered, reaching $4,037 at the time of reporting, representing a 2.91% decline over the past 24 hours.

BTC Markets cryptocurrency analyst Rachael Lucas commented: "Ethereum's break below the $4,000 psychological level resulted from a combination of technical breakdown, macroeconomic concerns, and cascading liquidations. With the failure to hold the $4,200 support level, altcoin liquidations exceeded $1.7 billion, with Ethereum alone accounting for $212.9 million in liquidations."

Despite the Federal Reserve implementing rate cuts in September, the 25 basis point reduction failed to ignite the sustained bull market rally as anticipated. Fed Chairman Powell's statements contributed to this outcome, as he indicated the central bank was "not in a hurry to cut rates further."

Additionally, Ethereum spot ETF inflows have decreased this month. Since September began, Ethereum ETFs have recorded cumulative net inflows of only $110 million, compared to over $3.8 billion in inflows during August.

However, cryptocurrency analysts note that long-term Ethereum holders are actually increasing their positions. "On-chain data reveals that over 420,000 ETH was withdrawn from exchanges this week, indicating the market is accumulating rather than panic selling."

CoinW Chief Strategy Officer Nassar Achkar also pointed out that Ethereum balances on exchanges have dropped to nine-year lows, with millions of dollars worth of Ethereum being transferred out of centralized exchanges.