Ether (ETH) Price Tumbles Amid Market Concerns and Decrease in Ethereum Blockchain Demand
Summary:
Ether (ETH) has experienced a 13% price drop since January 12, breaking the $2,400 support level. Analysts are concerned about a potential fall to the $2,000 mark. Despite Ethereum's total value locked (TVL) reaching a 19-month high earlier this month, it sharply declined from $34.7 billion to $32.2 billion between January 11 and 22, signaling decreasing demand. Market analysts have a pessimistic outlook on Ether's short and medium-term price trends with predictions of further dips. However, increased use of Ethereum-based protocols and the potential for an Ether spot ETF could provide long-term growth opportunities.
Ether (ETH), has seen a price decrease of 13% since January 12, falling from $2,719 and in a prominent move, dipped below the support threshold of $2,400. This downturn has spurred some traders to contemplate if ETH's value might further shrink towards the $2,000 mark. What insights can we gather from the on-chain data and technical analysis?
A significant development has been the fall of ETH's price under a pivotal support zone, an event detailed by independent analyst, Ali. They indicated that a significant range for ETH lay between $2,388 and $2,460, assuming it managed to sustain robust support. If the specified range holds, the pathway ahead is clear with the possibility of increased value due to minimal resistance.
The daily price activity of Ether emphasizes the criticality of this value range. The last instance Ether's value went under this range was in May 2022, resulting in a 63% plunge to under $1,000. On January 22, ETH slipped below this crucial range again, implying a possible further pullback. It is speculated the first significant support could come from the $2,000 mark, linked to the 200-day exponential moving average.
Despite the price drop, Ethereum's total value locked (TVL), a measure often used to evaluate the value and demand of proof-of-stake blockchains like Ethereum, reached a 19-month zenith on January 11 at $34.7 billion. This, however, faced a sharp drop to $32.2 billion by January 22, indicating a decrease in demand for the blockchain. Additionally, most of the top 10 Ethereum Decentralized Apps (DApps) have seen a decline over the last week, with Instadapp and Compound Finance particularly affected, experiencing an approximate 11% and 9.6% decrease in their TVL, respectively.
The decline in Ethereum's TVL corresponds with a decrease in its user base as suggested by a monitored drop in DApps' use. Also, a decline by 22.65% was seen over the past 30 days in unique active wallets (UAW) for Ethereum's main DApps.
Various market analysts maintain a negative outlook towards Ether's short-term and medium-term price trends. Limbo, one such analyst, shared a chart indicating Ether's price under $2,400, suggesting potential for short selling. Another observer, crypto blogger Market Profit, underscored Ethereum's bearish trends in the market.
Investors' attraction to Ethereum might keep dwindling if the current crypto market downtrend perseveres. The regular GBTC-linked selling of BTC at Coinbase could keep influencing market prices negatively. On the brighter side, an eventual rise in the usage of Ethereum-derived protocols and the potential advent of an Ether spot ETF could provide a positive long-term influence on price growth. It is essential, however, that readers undertake their own research and exercise caution when making investment decisions, as every trading move involves risk.
Published At
1/22/2024 11:05:57 PM
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