Is Ethereum’s Price Trending Upward?
While many anticipate an uptick in the price of Bitcoin, there are also high hopes for the overall crypto market, including Ethereum. However, recent developments have dampened some of that enthusiasm.
Ethereum’s Price Movements
Ethereum closed September at around $1,670 and remained relatively stable until October 1, with a slight increase above $1,690. On October 2, following Bitcoin’s surge, it jumped to $1,750 before settling around $1,735. It seemed like Ethereum was set for a positive October. However, things took a turn today as the price fell below $1,640 and hovered around $1,660.
Despite this setback, it is worth noting that Ethereum had experienced a rise at the end of September after being below $1,570 on September 25. The price has been fluctuating within a range since mid-June but managed to surpass $2,000 in July.
A Prolonged Period of Stability
Ethereum has been experiencing a long period of lateralization since January 20, with the price hovering around $1,700 to $1,800. This trend can be divided into three phases: from January 20 to March 2 at around $1,700; from March 17 to August 16 at around $1,800; and since August 17 at around $1,700.
Comparatively, Bitcoin has also been in a lateralization phase since March 17 around $27,000. Unlike Ethereum’s price decline, Bitcoin has maintained a higher level compared to the beginning of the year when it was at $23,000.
Ethereum’s Market Influence
While Ethereum led the rise of the crypto markets in April, its influence has diminished in recent months. Bitcoin has taken center stage, with other cryptocurrencies, including Ethereum, following closely behind.
One significant factor affecting Bitcoin’s price is the potential approval of spot Bitcoin ETFs by the SEC. This development primarily impacts Bitcoin’s performance.
The Impact of On-Chain Data
On-chain data suggests that September was not a favorable month for Ethereum. The total trading volume on the Bitcoin and Ethereum blockchains decreased by 17.5%, reaching $145 billion, the lowest since January and February.
The trading volume of stablecoins also dropped by 10.7% to $465.2 billion in September. However, the supply of stablecoins increased slightly to $116 billion, mainly driven by USDT and USDC.
The NFT market on Ethereum saw a significant decline in monthly trading volume (-31.8%), impacting the use of ETH for transaction fees. Additionally, average transaction fees decreased from $4 in August to just over $2 at the end of September.
Furthermore, spot volume on centralized exchanges (CEXs) fell by 28.3%, reaching its lowest level since October 2020 ($187.7 billion).
Overall, these trends indicate a decline in usage, which explains why Ethereum’s price is now below $1,700.
Hot Take: Challenges Ahead for Ethereum
Ethereum faces challenges as it struggles to maintain its position in the crypto market. Despite hopes for an uptick in October, recent price fluctuations and declining usage indicate a need for revitalization. With Bitcoin taking center stage and regulatory decisions impacting market performance, Ethereum must adapt to remain competitive. The decline in on-chain data, including trading volume and NFT market activity, further highlights the need for improvement. As the crypto market evolves, Ethereum will need to find new ways to regain its momentum and attract users.
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