Why is Ethereum (ETH) price down today?
The price of Ether (ETH) fell by 3.18% on January 9 and the latest price correction comes on the back of reduced activity on the Ethereum network and investors focusing on Bitcoin (BTC) and the ETF decision.
Let's examine the reasons why the price of Ether has dropped today.
Bitcoin price action and spot ETF news dominate the headlines.
The sale of Ether comes as Bitcoin continues to dominate the crypto markets with the approval of the BTC ETF expected on January 10. Some analysts believe the spot's approval of a Bitcoin ETF could benefit the price of Ether in the long term, the second-largest digital asset. It is down 0.5% to start in 2024.
Bitcoin dominance reached 50% on October 15, 2023, and hasn't dropped below that key level since then. On December 30, 2023, his dominance waned and he quickly shot to start 2024. Bitcoin's dominance over the crypto market reached 53 percent on January 9.
Typically, Bitcoin's decline in dominance is positive for crypto markets, suggesting the possibility of an altseason, but the outcome is yet to arrive.
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Withdrawal of Ethereum income and payments
The price of Ether has been declining due to Ethereum network fees. Ethereum network fees fell 10% in 24 hours on January 9 and 6.7% in 30 days. Current daily payouts are at $6.9 million, compared to a monthly high of $15.5 million on December 15, 2023.
In connection with the loss of payment, the Ethereum network recorded a low daily active users (DAUs) of 325,255 on January 9, a decrease of 12.5% in 7 days.
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Other protocols, including Bitcoin's BRC-20 standard and Solana's (SOL) speed increase, will come with significant rate reductions.
ETH traders have mixed expectations for 2024
Market analysts are expressing conflicting views on Ether's short- and medium-term price performance. Looking at the technical price aspects of Ether's movement, veteran trader Peter Brandt suggested that if the price falls below $2100, Ether is a short trade.
I already know this tweet will land like an egg dropped on a scrap metal pile. My bias remains to be short $ETH. I am a swing trader in ETH, not a hodler. The chart lacks the underlying strength IMO. If I go below 2100 and I'm wrong, it's not a big deal to me. pic.twitter.com/bWEflcoNn0
— Peter Brandt (@PeterLBrandt) January 9, 2024
On the other hand, independent market analyst Scott Melker highlighted the possible oversold conditions by pointing out the significant divergence in the ETH/BTC pair during the weekly time frame.
$ETH / $BTC
Hit the last key support on the chart at .0492 that I have been watching for weeks.
Oversold, potential high divergence on weekly RSI.
Please give me pic.twitter.com/ci0FiPg1LQ
— The Wolf Of All Streets (@scottmelker) January 9, 2024
Investors with high-risk assets and their interest in DeFi may continue to decline due to macro events, the emergence of new blockchains, and a decrease in volume. The eventual addition of protocols based on the Ethereum network and the potential of spot Ether ETFs could be a long-term catalyst for price growth.
This article does not contain investment advice or recommendations. Every investment and business activity involves risk, and readers should do their own research when making a decision.
