ETH Price: Ethereum’s Fight to Maintain Dominance
ETH Price– Ether (ETH) is currently trading at $2,444.27, having attempted multiple recoveries above the $2,500 mark since the crypto sell-off in early August. However, it has consistently failed to sustain its position above this critical price point, now facing its sixth consecutive day in the red.
Weak Demand from Ethereum ETFs
Market participants had hoped that the launch of spot Ethereum exchange-traded funds (ETFs) on July 23 would provide a boost to ETH’s price. However, recent data indicates a concerning trend. As of November 1, the Ethereum ETFs experienced net outflows exceeding $10.9 million, with a staggering total of $478.5 million in outflows since their introduction in the U.S. market.
This lack of investor interest is troubling, especially considering that institutional demand was anticipated to play a pivotal role in Ether’s appeal. CoinShares‘ latest Digital Asset Fund Flows Weekly Report highlights a stark contrast in flows into Ethereum investment funds compared to Bitcoin and Solana, with only $9.5 million inflows for Ethereum during the week ending November 1, while Bitcoin investment products attracted over $2.1 billion.
Increasing Competition from Layer-1 Alternatives
Ethereum is facing heightened competition from layer-1 blockchains that offer lower gas fees and enhanced scalability. While some activity has shifted to Ethereum’s layer-2 solutions, many users and developers are opting for other leading alternatives like BNB Chain, Solana, and Tron (TRX).
As a result, Ethereum’s network activity is lagging behind its competitors. Over the past 30 days, the number of unique active wallets (UAW) interacting with decentralized applications (DApps) on Ethereum decreased by 16%, contrasting sharply with a 19% increase on Solana and a 75% surge on Avalanche. Additionally, the total volume transacted on the Ethereum network dropped by 9.6%, while competing chains saw notable increases—BNB Chain rose by 1.5%, Solana by 10%, and Avalanche by 60%.
Ethereum’s Market Share Decline
Ethereum’s struggling fundamentals are reflected in its market dominance, which has reached a 42-month low of 13% as of November 4. This decline indicates that Ethereum is losing ground to Bitcoin and other altcoins. Max Price, a well-known crypto analyst, notes that Ether’s market dominance and price movements are closely tied to ETF inflows, stating, Follow the money; I’d only consider moving into ETH if ETF inflows start to pick up.
Furthermore, fellow analyst The Great Martis has raised concerns about ETH’s chart displaying bearish tendencies, with the potential for a downward breakout that could see prices fall below $1,000.
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