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As the cryptocurrency market declined yesterday, Ethereum (ETH) has now faced rejection at the key resistance level of $4,000 three times since March 2024. The second-largest cryptocurrency by reported market cap is now trading at the $3,400 level, down 6.7% in 24 last hour.
What is the reason behind the disappointing performance of Ethereum price?
While ETH posted a respectable 47% year-to-date (YTD) gain, it was outperformed by other major cryptocurrencies such as Bitcoin (BTC), Solana (SOL), and XRP, which posted much higher returns in the same period. . There appear to be several factors holding back Ethereum’s price momentum.
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One contributing factor is Ethereum’s relatively weaker brand recognition versus Bitcoin. This is what I highlighted Faded In response to the launch of exchange-traded funds (ETFs) in August. The introduction of these ETFs failed to generate any meaningful price movement for ETH.
Data It also reveals a significant discrepancy in investor interest between the two assets. The total net assets held in US ETH ETFs currently stands at $11.98 billion. In contrast, Bitcoin ETFs hold $109.66 billion — nearly ten times that amount.
Additionally, yesterday saw an outflow of over $60 million from ETH ETFs, representing the largest single-day outflow since November 19. Cryptocurrency analyst Ali Martinez noted that social sentiment around ETH has declined. receipt Its lowest point of the year. However, based on historical trends, this may paradoxically indicate an upside opportunity for Ethereum.
Futures traders also turned bearish on ETH, as the total premium for futures trades turned negative for the first time since November 6. The market decline led to the largest liquidation event for Ethereum since December 9, with $299 million liquidated in a single day. Such large-scale liquidations often lead to cascading sell-offs and increased price volatility.
Another recurring concern stems from the Ethereum Foundation’s tendency to sell ETH near local price peaks. In the last X mailLookonchain noted that the Ethereum Foundation sold 100 ETH on December 17. After this sale, the price of ETH fell by approximately 17%.
More doubts surround the Ethereum supply release. A recent Binance Research report Highlight The relatively high issuance rate of ETH raises questions about the “ultrasonic money” narrative, suggesting that Ethereum is a deflationary asset.
Is Ethereum Set for a Bounce?
Experienced cryptocurrency analyst @Trader_XO male They bought ETH spot price at the $3,200 price level yesterday. The analyst added that they expect a “good few weeks” of price consolidation before ETH’s next rally.
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Meanwhile, cryptocurrency trader @CryptoShadowOff has identified a potential ascending triangle formation on the monthly chart of ETH. According to their analysis, ETH may fall further to the $2,800 range than before Targeting New all-time high (ATH).
Market Analyst @CryptoBullet1 Confirm On the 4-hour chart, ETH has not been in the oversold territory since August 5, suggesting that a rebound may be on the horizon. At press time, Ethereum is trading at $3,400, down 6% over the past 24 hours.
Featured image from Unsplash, charts from Coinglass, X, and Tradingview.com
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