Ether's Value Drops Amid Reduced Ethereum Activity and Bitcoin's Anticipated ETF Approval
Summary:
Ether's value experienced a 3.18% decline on January 9, amid reduced Ethereum network activity and a shift in investor focus towards Bitcoin due to an imminent spot ETF decision. Ethereum's network fees have also dropped by 10% within 24 hours and 6.7% over the past 30 days. Market experts offer contrasting views regarding Ether's prospective short and medium-term performance, with some suggesting bullish divergence. The emergence of new blockchains, reduced trading volumes, and a decrease in high-risk asset interest could impact DeFi. However, the potential of a spot Ether ETF might serve as a long-term price growth catalyst.
The value of Ether (ETH) has taken a fall of 3.18% on January 9, in correlation with a decrease in activity on the Ethereum network. Investors are currently preferring to put their money in Bitcoin (BTC) while they wait for the spot ETF decision. The considerations to understand today's Ether's price drop are listed below.
Bitcoin's price changes and the news about a spot ETF has been the primary focus in the market lately. This focus on Bitcoin comes with the speculative approval of a BTC spot ETF on January 10. Analysts have suggested that the approval of a spot Bitcoin ETF could increase Ether's price in the future. However, currently Ether, as the second largest digital coin, seeks a downturn of 0.5% at the 2024's start.
Bitcoin's dominance in the market reached 50% on October 15, 2023, and has maintained that stance ever since. Eventhough dominance faded away slightly on December 30, 2023, it quickly ascended as 2024 commenced. As of January 9, the Bitcoin is dominant over 53% of the entire crypto market.
A reduced Bitcoin dominance generally indicates a positive trend for the overall crypto market, hinting a potential altseason, yet the impact is still to be seen.
The decline in Ether's price is concurrent with a significant reduction in the Ethereum network's fees. These fees have seen a drop of 10% in just 24 hours on January 9, and a 6.7% decrease over the last month. The current daily fees stand at $6.9 million, as opposed to the monthly high of $15.5 million recorded on December 15, 2023. Along with this, the number of daily active users registered on the Ethereum network also dropped to 325,255, a decrease of 12.5% in just a week.
This considerable reduction in volume is observed as other protocols like Bitcoin BRC-20 standard and Solana (SOL) are gaining popularity. Market experts hold differing views on Ether’s anticipated performance in the short and medium-term future. Veteran trader Peter Brandt proposed that Ether could be a short trade if the price plunged below $2,100. Conversely, independent market analyst Scott Melker noted potential oversold conditions, indicating a bullish divergence in the ETH/BTC pair.
Investors interest in high-risk investments and DeFi might reduce further due to global events, the rise of new blockchains, and a dip in trading volumes. However, the potential for a significant rise in Ethereum-based protocols and the possibility of a spot Ether ETF could act as a catalyst for long-term price growth. This news does not offer investment advice or suggestions. Each investment and trading action involves risk, and hence readers should perform their own research before making a decision.
Published At
1/10/2024 12:13:46 AM
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