- Ethereum’s underperformance is restricting money flow in the market, potentially driving its price down to $2,600.
- Old coins are moving, indicating that selling pressure might continue.
- A report by 10x Research suggests that Ethereum’s weak fundamentals are becoming a roadblock for Bitcoin as they prevent broad fiat inflow into the crypto ecosystem.
Ethereum’s underperformance could lead to a price drop, while its correlation with Bitcoin may be hindering the latter’s growth, according to a recent report by 10x Research.
Ethereum’s Underperformance and Its Impact
Ethereum [ETH] is struggling to replicate its performance in the last bull market, according to a recent report by 10x Research. The report suggests that Ethereum’s weakened fundamentals are preventing money from flowing into the market at a faster rate. Ethereum was a significant driver of the 2020/2021 bull cycle, but its current lagging performance is restricting the market from reaching its full potential.
ETH’s Correlation with Bitcoin
10x Research also noted that Ethereum’s correlation with Bitcoin [BTC] is hindering the latter’s growth. The report states, “Surprisingly, BTC and ETH remain highly correlated, with an R-square of 95%. Ethereum’s weak fundamentals are becoming a roadblock for Bitcoin as they prevent broad fiat inflow into the crypto ecosystem.” At press time, ETH’s price was $3,128, and the $3,100 region is a crucial spot for the cryptocurrency. If care is not taken, the price could decrease and hit $2,600.
Decreasing Traction and Price Danger
The number of new Ethereum addresses has been decreasing, which puts Ethereum in a precarious position. If the number of these addresses continues to fall, then ETH could be in a pole position for a slide below $3,100. Furthermore, ETH’s one-day circulation has been decreasing since March, indicating fewer coins have been engaged in transactions since then. This could be a sign of decreasing demand for the cryptocurrency. However, it also shows that the number of ETH set aside for selling could be low.
Conclusion
With the Mean Coin Age (MCA) on Ethereum’s network skyrocketing to 45.83, it implies that long-term holders of the cryptocurrency are moving their coins. Movements like this suggest a potential to sell. As such, ETH’s recovery might remain on the sidelines as the price might continue to struggle. The future of Ethereum’s price largely depends on its performance and its correlation with Bitcoin. Therefore, investors and traders should keep a close eye on these developments.
