Ethereum’s price has plummeted 56% this year, raising questions about its future. Despite predictions of its decline from figures like Cardano’s founder, recent data shows Ethereum remains strong with a trading volume of over $57 billion and a leading market share. The key price to watch is $2,150, which could signal further gains if exceeded.
The Ethereum price has faced significant struggles this year, dropping a staggering 56% since its peak in November. Comparatively, it hasn’t performed as well as leading cryptocurrencies like Bitcoin and Solana, even hitting record lows against Solana and approaching its 2020 lows relative to Bitcoin. This decline has prompted speculation about Ethereum’s viability, with Charles Hoskinson, the founder of Cardano, suggesting in a recent YouTube video that Ethereum may not survive the next 15 years.
Hoskinson pointed out the rise of layer-2 networks such as Base, Optimism, Arbitrum, and Polygon, which are increasingly appealing to users due to their efficient performance. These networks seem to siphon off users from Ethereum, which has struggled with slow processing speeds and high transaction costs. Despite this downturn, data on network performance indicates that Ethereum is not on the brink of extinction as some might think.
For instance, over the past month, Ethereum’s decentralized exchange protocols facilitated over $57 billion in trading volume, making it the second highest after Solana with $61.3 billion. Furthermore, Ethereum leads in total value locked (TVL) with a whopping $107 billion, which constitutes a commanding 57% market share in this metric. Meanwhile, its stablecoin market cap stands at $124 billion, also representing 51% of the market. Plus, Ethereum continues to dominate the non-fungible token (NFT) sector.
Moreover, according to Santiment data, Ethereum is seeing a rise in the number of holders, now exceeding 144.8 million—a significant increase from 130 million just last October. This uptick in holders is coupled with a noteworthy rise in the Mean Dollar Invested Age, which has now hit 658 days, suggesting that long-term investors are not inclined to sell.
As for technical analysis, Ethereum’s price has made a notable recovery after hitting a low of $1,383 earlier this month, currently at $1,787, its highest since early April. The daily chart indicates it has crossed above the upper limit of a falling channel established since last November and has surpassed its 25-day moving average. A bullish flag pattern is developing, with the Awesome Oscillator hinting at a potential upward movement above the zero line, a threshold last crossed in November which led to a significant price increase.
Moving forward, the crucial price level for Ethereum is $2,150, marking the lowest point from August and September last year. If ETH can break above this level, it could lead to further gains, potentially reaching $3,000. However, failure to surpass this mark might indicate a riskier trend, possibly leading to a breakdown and subsequent decline.
