.png){kind=logo}
The latest price movements of Ethereum (ETH) depict a cryptocurrency wrestling with significant market pressures, reflecting a broader malaise in the altcoin sector. Today, ETH is trading at approximately $2,296.43, marking a slight increase of 0.49% over the last 24 hours. The trading volume has surged to $9,697,797,169, indicating heightened activity. This dynamic comes in the wake of Ethereum’s struggles post the introduction of its ETFs, which instead of boosting the market, precipitated a decline to recent lows of $2,150 amid a strengthening US Dollar.
Ethereum's market cap stands firm, suggesting a robust valuation despite the liquidity challenges evidenced by a 40% plunge in exchanges since the Ethereum ETFs' debut. This dramatic drop in liquidity raises concerns about market stability and the ability to sustain price levels without significant slippage during trades.
Ethereum’s daily trading chart reveals cautious optimism among traders who might be eyeing potential rebounds from critical support levels. The price has stabilized around $2,200 after a swift rebound from the local low, although it still registers a net loss over the month. The daily trading activities underscore a market attempting to find its footing after a period of intense volatility, highlighted by the sharp liquidity decrease in both US and offshore exchanges.
Technical indicators such as the Relative Strength Index (RSI) on the daily chart hint at potential over-sold conditions which could presage a short-term recovery if buyer momentum increases. However, the market depth's sharp reduction complicates the recovery path, making any substantial price movements prone to creating waves in the trading landscape.
Ethereum has small bounces and retraces, typical of a market where traders are intervening at key levels. Price is oscillating just below $2,300 and struggling to stay above in a tight range. This is reflecting the overall market sentiment which is cautious of further downside, especially with liquidity dropping.
MACD on 4 hour chart is showing a bullish crossover, so we might see short term buying opportunities as traders buy the dips.
Recent CryptoQuant report showed some of the key reasons why Ethereum is struggling in the market. Ethereum’s transaction activity on chain has dropped significantly, which is partly due to institutional interest decreasing and Ethereum ETFs not performing as well as Bitcoin ETFs.
All these has brought the ETH/BTC to 0.0425, the lowest since April 2021. This is showing Ethereum is underperforming against Bitcoin and investors are not wanting to touch Ethereum during this volatile period.
Adding to Ethereum’s woes is the supply dynamics. After the Dencun upgrade, total supply of Ethereum has been increasing and is now at 120.323 million ETH, the highest since May 2023. With supply increasing and transaction fees decreasing after the upgrade, demand is weakening and network usage is decreasing which is not good for price.
And the investor preference is shifting to Bitcoin is evident in the spot trading volumes; Ethereum’s volume against Bitcoin has dropped from 1.6 to 0.76 last week. This is a big change in sentiment and positioning which might mean Ethereum will continue to underperform against Bitcoin.
