Ethereum (ETH), which has seen its price fall to a yearly minimum of $2,200, is now facing significant fear and selling pressure after a decline of 23%. Investors are concerned about the persistent underperformance of ETH compared with Bitcoin. This trend has been going on since September 2022. Since then, Ethereum is down 44% against Bitcoin.
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Investors and traders are left wondering why Ethereum is struggling. CryptoQuant’s recent report offers some insight, by highlighting several possible factors that could be affecting the performance of ETH. Market participants are closely monitoring ETH’s movement and many wonder if the asset will regain its momentum, or if it is likely to continue falling in the weeks to come.
Ethereum Exposed: A CryptoQuant report sheds light
Recent developments in the field of education report from CryptoQuant Clarifies the current factors affecting Ethereum. Ethereum is struggling due to a number of factors, including dwindling on-chain activities, declining institutional interest and poor performance by Ethereum ETFs compared with Bitcoin. The ETH/BTC exchange rate has now dropped to 0.0425, the lowest since April 2021.
Ethereum’s poor performance is likely due to a lower level of network activity compared to Bitcoin. Ethereum’s transaction fees, for example, have been declining, mainly due to lower fees following the Dencun upgrade. The number of transactions has dropped dramatically as well, from 27 at a high in June 2021 down to 11 today. This is the lowest level since July 2020.
Ethereum’s dynamics of supply are also not in favor of an increase in the price. Following the Dencun, ETH’s total supply has been steadily growing since April. upgrade. The supply of ETH is currently at 120,323 million, which represents the highest amount since May 20,23.
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In the last week, the relative volume of spot trades between Bitcoin and Ethereum has fallen from 1.6 down to 0.76. Ethereum’s relative price to Bitcoin has always risen when the trading volume of Ethereum outperforms that of Bitcoin.
Ethereum could continue to be underperformed by Bitcoin due to these factors in the near-future.
ETH Price Action
Ethereum (ETH), which is trading for $2,262, has dropped 23% from its previous highs. As ETH tries to test local demand, it continues to be driven by uncertainty and volatility.
The crypto currency is far below its 200-hour moving average at $2.565. This critical indicator typically indicates market strength. It is crucial that the bulls regain their control by breaking above the moving average.
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If Ethereum does not hold its support level at $2,200 (the low for the year), the price is likely to enter an even deeper correction, which could signal the beginning of a downturn. The short-term recovery of ETH is dependent on this support level. Losing it will likely trigger additional selling pressure. To prevent ETH’s slide into extended bearish territory, bulls must retake the key levels.
Chart from TradingView, Featured Image from Dall E
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Source: www.newsbtc.com