Why Is Ethereum (ETH) Losing Ground To Bitcoin? Key Report Explains ETH Struggles
07 September 2024 - 2:30PM
NEWSBTC
Ethereum (ETH) is currently facing significant selling pressure and
fear after a 23% decline, bringing its price down to yearly lows at
$2,200. One major concern for investors is the ongoing
underperformance of ETH compared to Bitcoin, a trend that has
persisted since September 2022. Since then, Ethereum has fallen 44%
against Bitcoin. Related Reading: Ethereum (ETH) Triangle Formation
Hints At A Double Bottom: Breakout and New ATH? This dramatic drop
has left investors and traders questioning the reasons behind
Ethereum’s struggle. A recent report from CryptoQuant offers some
clarity, pointing to several factors that may be affecting ETH
performance. As market participants continue to monitor ETH’s
movements, many are left wondering whether the asset can regain
momentum or if further downside is to be expected in the coming
weeks. Ethereum Exposed: CryptoQuant Report Sheds Light The recent
report from CryptoQuant offers clarity on factors currently
affecting Ethereum (ETH). Declining on-chain activity, shrinking
institutional interest, and the underwhelming performance of
Ethereum ETFs compared to Bitcoin are among the key contributors to
Ethereum’s struggles, with the ETH/BTC pair now sitting at 0.0425,
its lowest level since April 2021. Ethereum’s underperformance
seems to be tied to weaker network activity dynamics compared to
Bitcoin. For instance, Ethereum’s total transaction fees have
continued to decline, mostly attributed to the lower fees after the
Dencun upgrade. The relative transaction count has also fallen
dramatically, dropping from a record high of 27 in June 2021 to 11,
one of the lowest levels since July 2020. Moreover, Ethereum’s
supply dynamics are not supportive of a price increase. Since early
April, the total supply of ETH has steadily grown following the
Dencun upgrade. The current supply is at 120.323 million ETH, the
highest level since May 2023. Related Reading: Ethereum
Enters Oversold Territory, Can The Pump Send It To $6,000?
Additionally, traders and investors have shown a clear preference
for Bitcoin over Ethereum, as the relative spot trading volume of
ETH to Bitcoin has dropped from 1.6 to 0.76 in the past week.
Ethereum’s price has historically risen relative to Bitcoin when
its trading volume outperforms Bitcoin’s. Given these factors,
Ethereum may continue to underperform compared to Bitcoin in the
near future. ETH Price Action Ethereum (ETH) is currently trading
at $2,262 after a significant 23% drop from its local highs.
Volatility and uncertainty continue to drive the market as ETH
tests local demand near its yearly lows of around $2,200. The
cryptocurrency remains far below its 4-hour 200 moving average (MA)
at $2,565, a critical indicator that typically signals market
strength. For bulls to regain control, it is essential for the
price to break above this moving average and challenge the local
highs at $2,600. Related Reading: Bitcoin Fear And Greed Index
Falls To ‘Extreme Fear’ As BTC Dips Below $54,000 However, if
Ethereum fails to hold support at its yearly low of $2,200, the
price will likely enter a deeper correction phase, potentially
signaling the start of a bear market. This level is crucial for
ETH’s short-term recovery, as losing it could trigger further
selling pressure. Bulls need to retake these key levels to prevent
ETH from slipping into prolonged bearish territory. Featured image
from Dall-E, chart from TradingView
Bitcoin (COIN:BTCUSD)
Historical Stock Chart
Von Sep 2024 bis Okt 2024
Bitcoin (COIN:BTCUSD)
Historical Stock Chart
Von Okt 2023 bis Okt 2024