Ethereum’s price has been facing challenges recently, with various factors contributing to its downward trend. Currently trading at $2,550, the cryptocurrency has experienced a 37% decrease from its peak earlier this year. In contrast, Bitcoin is only 4.7% away from its all-time high.
One of the main issues Ethereum is facing is the increasing number of tokens being held in exchanges, indicating that some holders are starting to sell off their assets. Even the Ethereum Foundation and Vitalik Buterin have reportedly been selling their holdings. This trend is further exacerbated by the sluggish demand for spot Ethereum ETFs, with outflows reaching $480 million, while Bitcoin ETFs have seen significant inflows totaling over $24 billion.
Moreover, Ethereum has lost market share in the decentralized exchange sector to Solana, with platforms like Raydium and Orca surpassing Ethereum in terms of trading volume. Additionally, Ethereum’s dominance in the stablecoin market has slipped to 48%, down from over 60% just a year ago.
Analyst Peter Brandt has predicted a potential 40% decline in Ethereum’s price, with a projected drop to $1,551. The daily chart shows that Ethereum is currently below the 50-day moving average and has formed a bearish pennant pattern, indicating a potential bearish breakout in the near future. The key support levels to watch are $2,817 and $2,117, with the latter being the lowest point on August 5.
Stablecoins have gained significant traction in the crypto industry, with Tether alone making a net profit of $2.2 billion in the third quarter. These stablecoins have also become important in cross-border payments, particularly in countries facing sanctions like Iran, North Korea, and Russia.
Looking ahead, Ethereum’s price may continue to face downward pressure in the coming weeks, as indicated by the various technical and fundamental factors at play. Traders and investors should closely monitor key support levels and upcoming developments in the cryptocurrency market to make informed decisions regarding Ethereum and other digital assets.
