Ethereum (ETH) price was under pressure on Thursday, dropping 3.3% from over $3,040 to its current level of around $2,930 amid high daily trading volume of $13.5 billion, according to Yahoo Finance data.
Ether has largely erased Wednesday's post-US Consumer Price Index (CPI) gains, weighed down by bearish sentiment creeping back into the market.
Following the recent death cross of the ETH/BTC pair, Ether price just hit a new three-year low.
In a note on Wednesday, Coinbase research analyst David Han cited several reasons for ETH's poor performance.
“The approval of the Spot Bitcoin ETF in the US strengthens Bitcoin’s store of value story and status as a macro asset.”
“On the other hand, open questions remain about ETH’s fundamental position in the crypto sector,” he continued.
The SEC is expected to reject multiple U.S. Spot Ethereum ETF applications later this month.
Many believe this is because the SEC is still considering whether Ethereum can be considered a security.
I know this is widely considered a possibility, but this is an official notice that the SEC is considering security questions for ETH in future spot ETF orders. Please note that this question has never been asked regarding spot/futures BTC ETF products (afaict). pic.twitter.com/TwhqmTnJfC
— Scott Johnson (@SGJohnsson) May 14, 2024
Additionally, “competing layer 1s like Solana undermine Ethereum’s status as the ‘go-to’ network for decentralized app (dApp) deployments,” Han said.
Ethereum’s Dencun upgrade earlier this year also lowered the cryptocurrency’s burn rate due to a significant drop in fees.
This is likely to be a long-term positive for Ethereum adoption, as high fees discourage the use of the network.
However, some believe that the declining burn rate is bearish for ETH.
No wonder Citron Research founder Andrew Left told Benzinga that he shorted Ether.
Ether is labeled as a security and does not receive the same stamp of approval as Bitcoin, he argued.
ETH/BTC is still in a multi-year downtrend. Whales may be reluctant to accumulate when Bitcoin, which is much safer and more accepted, looks very strong.
Ethereum Price Prediction – Where Will ETH Price Go Next?
The recent decline in Ethereum prices suggests that bears continue to have significant control over this market in the short term.
First, ETH continues to find strong resistance at key short-term moving averages. The big hurdle I couldn't get over this week was 21DMA.
Second, Ethereum price remains locked in a medium-term downtrend channel from its early year highs.
Third, Ether appears to be forming a descending triangle structure, with the current price floor around $2,850.
Descending triangles usually form before a bearish breakout.
Traders should also keep an eye on the uptrend that has been going on since October.
Ethereum price appears to be indicating a decline below recent lows. The first downside target would be around the early 2024 high of $2,700.
The next major support zone will be around $2,150. If ETH retests this zone, the whales could return to the market and accumulate again.
Yes, the situation is not good for ETH compared to BTC. However, we are still in the midst of a crypto bull market.
And at the $2,150 level, Ether would be discounted by nearly 50% from its previous year-to-date high.
Ethereum Alternatives to Consider
Ethereum's decline comes as meme coin season is about to pick up again.
It's definitely meme stock season again since GameStop's iconic Roaring Kitty returned to social media earlier this week.
Investors looking for better upside prospects than what ETH offers may want to position themselves in the meme coin market.
Established meme coins like Dogecoin and Shiba Inu are relatively “safe” bets that can yield 5x returns.
Investors looking for 50-100x returns will need to find newer meme coins.
One new meme coin project that Cryptonews analysts really like is Wiener AI (WAI).
A fun new sausage dog-themed coin offers a suite of AI-powered trading tools.
WienerAI is more than just a trading bot
This is your AI trading companion!
Details will be released soon! pic.twitter.com/HG5C0tE6Rk
— WienerAI (@WienerDogAI) May 14, 2024
Investors have already poured nearly $2 million into WAI's presale.
Interested investors should act quickly. WAI's price will increase once the pre-sale reaches $2.15 million.
Pre-sale investors are also currently earning a huge staking yield of 499%, but this yield will decrease as the pre-sale progresses.
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