Ethereum (ETH) price stabilizes at $2,500 as institutions favor Bitcoin ETFs
TLDR:
Ethereum prices struggle to maintain $2,500 level bearish sentiment ETH underperforms Bitcoin and Solana while ETHSOL ratio at all-time high institutional investors show stronger preference for Ethereum ETFs ($66B vs $7B AUM) Layer-2 networks Value extraction and competition from other Layer-1 chains pose a threat.Technical analysis suggests a further decline to the $2,300 support level.
Ethereum, the second-largest by market capitalization, continues to face market pressure as its price hovers around $2,500. The digital asset suffered a 5% decline last week, struggling to hold support levels amid growing bearish sentiment.
The latest market data on Friday, October 25, 2024 shows Ethereum trading at approximately $2,495 during the first European session. The daily trading volume of cryptocurrency stands at 15 billion dollars, which indicates active market participation despite the decline.
Technical indicators present a mixed view for Ethereum. The asset is currently trading above the long-term horizontal support level at $2,450, an area that has served as support and resistance since 2021. The price action has formed what analysts have described as an upward parallel channel from June 2022.
The institutional investment landscape shows the difference between Bitcoin and Ethereum adoption. Current market data indicates that U.S. spot Bitcoin ETFs have accumulated approximately $66 billion in assets under management, and Ethereum ETFs hold approximately $7 billion. This significant difference reflects stronger institutional confidence in Bitcoin as an investment vehicle.
Competition for Layer-1 blockchain has intensified, especially from networks like Solana. The latest network statistics show Solana processing around 4 million addresses in 24 hours, while Ethereum recorded around 377,000. The Tron network showed strong activity with 2.2 million active addresses.
Ethereum's total value (TVL) remains high in decentralized finance (DeFi) at $46.7 billion, representing more than half of the total $87 billion DeFi market. However, concerns about extracting value from Layer-2 solutions have emerged in the community.
Market sentiment on social media platforms has turned increasingly negative. Industry figures have raised questions about Ethereum's relationship with Layer-2 networks, where only a small fraction of the value generated is fed back into the main chain. This dynamic has fueled discussions about the network's long-term value proposition.
The ETHBTC trading pair has been down since March 2016, raising questions about Ethereum's performance relative to Bitcoin. The high volatility of ETH compared to BTC has become a point of discussion among traders and analysts.
Technical analysis shows that Ethereum is forming a bearish candlestick pattern on the weekly time frame. The Relative Strength Index (RSI) has fallen below 50, marking a significant reversal from previous bullish cycles. However, the Moving Average Convergence/Divergence (MACD) is showing some positive progress.
On the daily timeframe, Ethereum trades in an ascending parallel channel, commonly considered a corrective pattern. Recent inflation has failed to reach a resistance trendline, suggesting weakening upward momentum.
Kraken Inc's announcement of a new Ethereum layer-2 solution follows Uniswap's similar move, raising questions about the benefits of proof-of-concept in the growing off-chain ecosystem. These developments come as the network grapples with questions of value capture and sustainability.
Current technical observations suggest support at $2,300 if current levels do not hold. Resistance remains firm at $2,800, a level that has rejected repeated upward moves in recent months.
