After hitting $3,972 following the approval of exchange-traded funds (ETFs), Ethereum (ETH) underperformed last week, down 10%, versus Bitcoin and the broader crypto market. cryptocurrencies, which led traders to wonder whether… bearish or not. I finish.
To put this into context, the price of Bitcoin (BTC) fell 6% over the same period, while the total cryptocurrency market capitalization fell 5.3%.
A number of market and technical indicators show that ETH could see a deeper correction before making another attempt at recovery.
ETH/BTC Ratio Trends Down Over the Past Week
The price of Ethereum has fallen 10% over the past seven days, leading to a decline in the performance of Bitcoin and other top tokens. The price of Bitcoin fell 5.5% over the past week, with the Ethereum/Bitcoin ratio falling 5.21%, from 0.055 on June 3 to 0.0513 on June 11, its lowest level since on May 20.
Currently, there are a number of reasons why ETH is underperforming, including factors specific to Bitcoin in 2024. Bitcoin ETFs in the United States have seen great success, seeing almost $2 billion in trading. capital inflows last week. Additionally, the upcoming CPI reading and FOMC meeting decision on interest rate cuts preceded a notable market correction over the past few months, affecting all cryptocurrency prices, including of Ethereum.
Additionally, there has been a decrease in Ethereum network activity (in specific measures) over the past 90 days. Data from Glassnode reveals that daily active addresses on the Ethereum network increased from 622,963 addresses on March 20 to 458,400 addresses on June 10. There was a 1.2% drop in the last 48 hours alone.
Although Ethereum remains the network to beat in the tier 1 segment, Solana has recently taken market share in this segment in terms of on-chain activity. According to data from DappRaddar, Ethereum’s NFT volume fell 9% over the past seven days to 105 million.
The figure below shows that the Ethereum network lags behind Solana and the BNB chain in terms of total UAWs. Over 524 billion TUA have interacted with the protocol, representing a 4.5% decrease over the last seven days. This is significantly lower than the 2.7 million UAWs on Solana, which grew 74% during the same period.
A decrease in on-chain activity indicates a drop in demand for ether within the ecosystem, which affects its price.
about: Munchables Hacker Returned $62.8 Million in Ether Ransom-Free
Ether faces strong resistance on the upside
Ethereum’s recent pullback caused it to lose a crucial support level around the $3,500 demand zone, turning it into resistance. Previous price action has indicated that this zone represents stubborn resistance for ETH bulls. The last drop below this level on April 11 resulted in a 25% decline to the low of $2,814, reached on May 2.
Data from IntoTheBlock reinforces the importance of this resistance zone. The In-Out-of-Money Price (IOMAP) model reveals that this area lies in the price range of $3,476 and $3,577, where around 2.6 million addresses have already purchased around 1.08 million of ETH.
If this resistance level sees a high volume of activity from sellers in the short term, the price of Ether is expected to fall further.
Ethereum Market Pattern Indicates Continued Downtrend
After hitting a six-week high of $3,973 on May 27, ETH price retreated as bears took profits and the broader cryptocurrency market corrected. The price has since fallen by 12% to the current price of $3,511.
Despite the recovery, a long bearish candle is visible on the daily chart, indicating the severity of the downtrend.
Ethereum bulls are banking on immediate support from the psychological $3,400 level. Closing the daily candle below this level would indicate that the bulls are unable to defend this level, anticipating a decline to $2,840. Such a move would represent an 18% drop from the current price.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research before making a decision.
