The Ethereum (ETH) price has experienced a 3.3% drop on Thursday, falling from above $3,040 to around $2,930. The daily trading volume has reached $13.5 billion, according to Yahoo Finance data. This decline has erased the gains made after the US CPI data release, as bearish sentiments return to the market.
In a recent note, Coinbase research analyst David Han highlighted reasons for ETH’s underperformance. He mentioned that the approval of spot bitcoin ETFs in the US has strengthened bitcoin’s store-of-value narrative, while questions about ETH’s fundamental positioning within the crypto sector persist. The SEC is expected to reject applications for multiple spot Ethereum ETFs in the US, possibly due to concerns about Ethereum’s classification as a security.
Competing layer-1 networks like Solana have also impacted Ethereum’s position as the leading network for decentralized app deployment. Additionally, Ethereum’s recent upgrade, Dencun, has reduced the crypto’s burn rate by lowering fees. While this may encourage adoption in the long term, some view the lower burn rate as a bearish signal for ETH.
Citron Research founder Andrew Left has expressed a bearish view on Ether, suggesting that it will be labeled as a security and may not receive the same approval as Bitcoin. The ETH/BTC pair remains in a multi-year downtrend, with whales potentially hesitant to accumulate ETH while Bitcoin remains a safer option.
The Ethereum price is currently facing resistance at its short-term moving averages and is in a medium-term downward trend channel. It appears to be forming a descending triangle structure, with a potential price floor around $2,850. Traders should monitor the uptrend in place since October, as a break below recent lows could lead to further downside towards $2,700 and $2,150.
Despite the challenges facing ETH relative to BTC, the overall crypto market is still in a bull phase. Investors seeking alternative opportunities may consider meme coins, with established coins like Dogecoin and Shiba Inu offering potential returns. For higher gains, newer meme coins like Wiener AI (WAI) are gaining attention for their AI-powered trading tools.
Investors have shown interest in the WAI presale, which offers significant staking yields. As the presale progresses, the staking rewards may decrease, making it a time-sensitive opportunity for those looking to invest in this new meme coin project.