As a researcher with a background in cryptocurrencies and financial markets, I have closely monitored Ethereum’s (ETH) recent price action and developments within the ecosystem. The ongoing correction in the crypto market has seen ETH test support levels below $3,000, forming a descending triangle on the daily time frame.
During the recent cryptocurrency market downturn, Ethereum (ETH), which holds the second-largest position among digital assets with an approximate fully diluted value of $360 billion, has frequently dipped below the $3,000 mark in the past five weeks. On the daily chart, Ethereum’s price against the US dollar is shaping up as a descending triangle, featuring a strong support level around $2,972.
When Ethereum’s trading instrument nears the boundary of its consolidation, a rupture in either direction could trigger significant price swings, as per the assessment of experienced market analyst Peter Brandt. However, based on his analysis of Ethereum’s price behavior, no clear indication of an imminent trend shift has emerged.
As a researcher studying the cryptocurrency market, I find the Ethereum chart (ETH) particularly captivating at the moment. The shape of the price movement is elongated and doesn’t fit neatly into the definition of a flag pattern. However, considering the trendlines, a channel seems to be the most plausible label for this chart. I’m open to interpreting it either way based on how the price behaves within these boundaries.
— Peter Brandt (@PeterLBrandt) May 9, 2024
Ethereum No Longer Ultra Sound Money
According to a recent article by Coinspeaker, Ethereum’s reputation as a “sound money” has been weakening after the Denascent upgrade in March 2024. Specifically, Ethereum’s network has seen decreasing transaction fees from layer two projects following this update.
As a crypto investor, I’ve closely followed the developments surrounding Ethereum (ETH). The recent Dencun upgrade has been a game-changer for me, bringing back inflationary pressures to ETH. This shift in dynamics may weaken the “Ultrasound Money” narrative, which emphasizes Ethereum’s potential as a deflationary currency due to the decreasing total supply resulting from burned transaction fees. However, with fewer fees being burned than anticipated, the overall ETH supply hasn’t been reduced enough, making it a potentially inflationary asset.
Based on data from Etherscan’s on-chain analysis, approximately 547 ether units were burnt on May 8, 2024. Contrastingly, prior to the Denis update, Ethereum network saw an average daily burn of around 7,000 ether units.
As a crypto investor, I acknowledge that the Ethereum network’s Dencun upgrade was essential for us to remain competitive in the market against other L1 chains like Solana, Toncoin, and BSC. The need for speed and affordability is crucial for most web3 projects, including gamification platforms, to onboard more users smoothly. Therefore, I am excited about this upgrade as it promises to deliver faster and ultra-cheap transactions, giving Ethereum an edge in attracting new users and projects.
Political Entanglements
Prior to the SEC’s final decision on the VanEck spot ETH ETF, scheduled for May 23rd, the Ethereum community has become the focus of intense political debates in the US. According to Coinspeaker, the SEC maintains that Ethereum should be classified as a security rather than a commodity, similar to Bitcoin.
As a result, Wall Street experts predict that the Securities and Exchange Commission (SEC) in the United States is likely to decline around a dozen proposals for Ether spot exchange-traded funds (ETFs) towards the end of this month. Simultaneously, former US President Donald Trump has expressed his backing for all altcoins and indicated that opposition from the government would cease if he gets re-elected as the President of the United States later in 2023.
It’s highly probable that the approval process for an Ether-based exchange-traded fund (ETF) at location E will mirror Bitcoin’s experience, given Consensys’ recent legal action against the U.S. Securities and Exchange Commission (SEC).
The Ethereum price is mirroring Bitcoin’s price trend, implying that the leading altcoin may hit a new record high in the near future. However, for Ethereum to maintain its bullish trajectory, it’s essential that its daily chart recaptures the 50 Moving Average as a foundation of support.
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2024-05-09 19:49