Markets
Ethereum price imminent drop to $2,500
The crypto market has recently witnessed a slowdown, marked by significant price drops in key assets like Ethereum and Bitcoin.
Particularly, Ethereum (ETH) appears to be facing pronounced downtrends, leading many crypto analysts to predict further declines for the second-largest crypto by market capitalization.
Ethereum is at risk of falling to $2,500
According to a recent investor advisory from crypto research firm 10X Research, Ethereum’s potential drop to $2,500 is a concern due to its weakened fundamentals. They noticed Ethereum inconsistent performance in the current market cycle, a departure from its role as a catalyst for bull runs in previous cycles.
The company emphasized the impact of Ethereum on Bitcoin’s growth this cycle, highlighting a strong correlation between the two, with an R-squared of 95%. Ethereum’s declining fundamentals are seen as an obstacle to widespread fiat entry into the crypto ecosystem, thus impeding The rise of Bitcoin.
“Ethereum: the world’s number 2 token continues to disappoint from both a fundamental and technical perspective. The daily chart below looks particularly weak to me. If 2,950 breaks, we will easily see the 2,500-2,600 range in a dip,” Daniel Yan, Founder and CIO of Kryptanium Capital he said.
See more information: Ethereum (ETH) Price Prediction 2024/2025/2030
Ethereum price analysis. Source: 10x Research
Meanwhile, poor price prediction could result from reduced network activity on the mainnet, leading to record average transaction fees. According to blockchain analytics platform IntoTheBlock, a increasing The number of transactions are now settled on Ethereum Layer 2, with the three largest L2 accounting for a record 82% share of all Ethereum transactions last month.
This coincides with the relative evolution Spot Ether exchange-traded fund (ETF) forms. On May 10, Ark 21 shares reviewed its Ethereum ETF proposal, falling staking plans.
Bloomberg ETF analyst Eric Balchunas suggested the change could be aimed at refining application documents based on feedback from the SEC, although there was no comment on the application.
“While it may appear that they are getting their documents into shape based on the SEC’s comments (which would be good news), there has been no comment. So it’s likely a Hail Mary or perhaps trying to give the SEC one less thing to use in its rejection. I’m not sure (yet)”, Balchunas he said.
See more information: Ethereum ETF explained: what it is and how it works
Despite this, the change appears to have increased the probability of approval of the Ethereum ETF on Polymarket, an on-chain prediction protocol. Data on the website it indicated that the chances of approval almost doubled to 14% on May 10, after the change of candidates.
However, approval expectations remain moderate due to the SEC’s reserved stance regarding Ethereum ETF applications.
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