The cryptocurrency market has recently witnessed a downturn, marked by significant price declines in major assets such as Ethereum and Bitcoin.
Ethereum (ETH) in particular appears to be struggling with a pronounced bearish trend, with many crypto analysts predicting further declines for the second-largest cryptocurrency by market capitalization.
Ethereum risk drops to $2500
According to a recent investor advisory by cryptocurrency research firm 10X Research, there are concerns that Ethereum could fall to $2,500 due to its weakening fundamentals. They noted that Ethereum's performance in the current market cycle has been inconsistent, deviating from its role as a bull market catalyst in previous cycles.
The company highlighted Ethereum's impact on Bitcoin's growth during this cycle, highlighting the strong correlation between the two with an R-squared of 95%. Ethereum's declining fundamentals are seen as an impediment to widespread fiat inflows into the cryptocurrency ecosystem, thereby hindering Bitcoin's rise.
“Ethereum: The world’s second largest token continues to disappoint from both a fundamental and technical perspective. The daily chart below looks particularly weak to me. A break below 2950 could lead to a crash. You can easily see the 2500-2600 range at times,” said Kryptanium Capital founder and CIO Daniel Yang. Said.
Read more: Ethereum (ETH) Price Prediction 2024/2025/2030
On the other hand, poor price predictions may be due to reduced network activity on the mainnet, which is driving average transaction fees to record lows. According to blockchain analysis platform IntoTheBlock, To increase Many transactions are now settled on Ethereum Layer 2, and last month the three largest L2s accounted for a record transaction share of 82% of all Ethereum transactions.
This coincides with developments regarding the Spot Ether Exchange Traded Fund (ETF) application. On May 10th, Ark21 acquired the stock. revision Their Spot Ethereum ETF proposal has halted staking plans.
Bloomberg ETF analyst Eric Balchunas suggested the changes may be aimed at refining the filing based on SEC feedback, but had no comment on the filing.
“While it may appear that the document is based on the SEC's comments (which would be good news), there are no comments. So either hurray or the SEC gives one reason for the denial. We may be trying to reduce it (yet),” Balciunas said. Said.
Read more: Ethereum ETF explained: What is Ethereum ETF and how does it work?
Nevertheless, this amendment appears to increase the chances of a Spot Ethereum ETF being approved on Polymarket, an on-chain prediction protocol. data The site shows that the chance of approval has nearly doubled to 14% as of May 10, following the applicant's transfer.
Nevertheless, expectations for approval remain subdued due to the SEC's cautious stance on Ethereum ETF applications.
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