REASONS BEHIND TODAY’S DROP IN ETHEREUM (ETH) PRICE 

Ether (ETH) experienced a 3.18% decline in price on January 9th, primarily influenced by a surge in Bitcoin (BTC) dominance and anticipation surrounding a potential spot BTC Exchange-Traded Fund (ETF) decision.

The decline in Ether’s price occurs amidst a backdrop of decreased activity on the Ethereum network and an investor shift towards Bitcoin, with the impending spot BTC ETF decision capturing significant market attention.

Ether’s Price Movement

On the date in question, Ether’s price index showed a downward trend, falling to $2,376. This downturn coincides with Bitcoin’s increasing market dominance, which reached 50% on October 15, 2023, and has maintained above that threshold ever since. As of January 9th, Bitcoin’s dominance over the crypto market stood at 53%.

Bitcoin’s rising dominance typically signals a shift in investor focus away from altcoins like Ether. Despite some analysts suggesting that a spot Bitcoin ETF approval could eventually benefit Ether, the immediate impact has been a dampening of Ether’s price.

Ethereum Network Activity and Fees

Another contributing factor to Ether’s price decline is the noticeable drop in Ethereum network fees, which fell by 10% in 24 hours on January 9th and by 6.7% over the past 30 days. The daily fees on the Ethereum network have reduced significantly from a monthly high of $15.5 million to $6.9 million.

Alongside the fee reduction, there was also a decline in Ethereum’s daily active users (DAUs), which decreased by 12.5% over seven days, indicating reduced network activity.

Competing Protocols and Market Sentiment

The Ethereum network’s decrease in volume and user activity occurs as other protocols, such as the Bitcoin BRC-20 standard and Solana (SOL), gain traction in the market. This competitive landscape may also impact investor sentiment towards Ether.

Analysts’ Views on Ether’s Future

Market analysts present mixed expectations for Ether’s price trajectory in 2024. Some, like veteran trader Peter Brandt, suggest that Ether could be a short trade if its price falls below $2,100. In contrast, other analysts, like Scott Melker, point to potential oversold conditions, indicating a possible bullish divergence in the ETH/BTC pair on the weekly timeframe.

The ongoing market dynamics, including macroeconomic factors, the rise of new blockchain technologies, and changes in trading volume, will continue to influence investor appetite for assets like Ether. The potential growth of Ethereum network-based protocols and the prospect of a spot Ether ETF could serve as long-term catalysts for Ether’s price appreciation.

Read more from the blog

News

3 May 2023

StoneBlock CEO: Nervous investors will be eliminated from the market

News

3 Jun 2024

OKX LAUNCHES CRYPTO EXCHANGE AND WALLET IN THE NETHERLANDS 

News

3 Jun 2024

BITCOIN TRANSACTIONS HIT YEARLY HIGH WITH $25B MOVED