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Markus Thielen, Research CEO of 10x Research, highlighted Ethereum’s trajectory and suggested a possible drop to $2,500. His analysis points out that the fundamentals within the Ethereum network are weak, which could not only impact its value but also pose obstacles to Bitcoin's progress.
Ethereum has long been considered the cornerstone of the cryptocurrency market, often touted as the backbone of decentralized finance (DeFi) and non-fungible token (NFT) ecosystems. However, in this current cycle, Ethereum remains a basket case.
by 10x Researcher, Ethereum became a driving force in the 2020-2021 cycle as it was aimed at replacing the traditional banking system. The minting of NFTs could open up new avenues for the acceptance of cryptocurrencies, evolving into other personalized pieces of paper on the blockchain, and resulting in the widespread adoption of “wallets.” However, Ethereum developers did not react quickly enough.
The inability of Ethereum developers to react quickly in the face of huge opportunities for the ETH ecosystem and many other variables is weighing on Ethereum's fundamentals and casting doubt on its prospects.
According to Thielen, the effects of Ethereum’s weak fundamentals extend beyond the ecosystem. Thielen pointed out that there is a high correlation between Bitcoin and Ethereum with an R-squared of 95%. He says Ethereum's weak fundamentals are a stumbling block for Bitcoin, preventing large-scale fiat inflows into the crypto ecosystem.
Thielen's predictions coincide with a period of increasing uncertainty and volatility in the crypto market, with selling pressure on the market. At the time of writing, ETH has fallen 4.32% to $2,902 over the past 24 hours, consistent with the broader crypto market decline.
Amid the hype surrounding the approval of the Spot Bitcoin ETF and the market rally, unrealized gains for Bitcoin holders increased much faster than those for Ethereum investors, according to Glassnode. His NUPL indicator for Bitcoin exceeded 0.5 and he reached the euphoria stage three months earlier than the equivalent indicator for Ethereum.
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Tomiwavoldo Olajide
