- Ethereum hit bottom at $3,118 earlier today, hitting a five-month low.
- Based on Santiment data, the ratio of active Ethereum addresses vs. price implies a bullish narrative.
- Analysts at JP Morgan believe that Ethereum faces stiff competition from DeFi to maintain its dominance in the ecosystem.
Ethereum price dropped to a five-month low earlier today. Proponents believe that Ethereum’s dominance in the crypto ecosystem has dropped.
Ethereum bears push the altcoin’s price lower
Ethereum price dropped below $3,118 as bears took over the altcoin. Ethereum price hit a new five-month low. Though the altcoin’s market capitalization exploded in 2022, analysts have predicted that Ethereum’s dominance in the market could shrink this year.
According to the average market value to realized value (MVRV), the current price is the most pain that Ethereum traders have felt since July 2021. The metric is obtained by dividing an asset’s market capitalization by realized cap. Average MVRV implies a bullish outlook on Ethereum price.
Ethereum’s average MVRV
Analysts at JP Morgan believe that Ethereum is competing with DeFi protocols to maintain its dominance. The leader in financial services believes that a delay in sharding could make it challenging for Ethereum to compete with DeFi projects in the future.
Ethereum has a strong network of developers and contributors that offer the altcoin a solid foundation to drive adoption and utility. However, there is a spike in competition from DeFi projects and Ethereum-killers with their rising on-chain activity and active users.
@ChartSimpson, a crypto analyst and trader, believes that Ethereum was oversold since the crypto market bloodbath that followed the Covid crisis in 2020.
$ETH has not been this oversold on the daily RSI since the March 2020 Covid crash.— Chart Simpson (@ChartSimpson) January 7, 2022
FXStreet analysts believe that Ethereum is in the ideal bearish Ichimoku breakout.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.