ETH price hovers around $2800, struggling to break through, mainly due to the following reasons:
Technical Aspects
- Resistance Sell Pressure: According to Glassnode data, there is a significant distribution of chips around the $2800 mark for ETH. As the price approaches this area, selling pressure increases since many holders who bought at higher prices will seek to reduce risk in this zone.
- Decline in Trading Volume and Network Fees: Despite Ethereum's total locked value (TVL) reaching new highs, its trading volume and network fees are declining. In the past month, Ethereum’s trading volume has decreased by 37%, and trading fees have dropped by 72% compared to two weeks ago. This indicates a reduction in market activity, making it difficult to support further increases in ETH prices.
Market Aspects
- Cautious Market Sentiment: Notable cryptocurrency trading expert XO points out that Ethereum is consolidating below the important resistance level of $2800. If it fails to break through in the coming days, it will face correction pressure, potentially forming a range-bound trend for at least several weeks or even longer.
- Rise of Competing Networks: Ethereum faces fierce competition from emerging public chains like Solana. These emerging public chains perform well in terms of trading volume, posing a threat to Ethereum's market share and making it difficult for ETH to leverage its ecological advantages to push prices higher.
Policy Aspects
- Uncertainty of ETF Approval: The approval of Ethereum spot ETFs is one of the key factors for pushing ETH prices to break through. However, these ETFs are currently under review by the U.S. Securities and Exchange Commission (SEC), with a deadline of April 9. Due to a lack of staking yields, the demand for these ETFs may be limited, hindering the inflow of institutional funds.
