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Highlights
- Ethereum price has been sluggish in the past few weeks and shows no signs of hitting all-time high of $4,093.
- Bitcoin's digital gold narrative trumps Ethereum's world computer, which explains lack of interest in spot ETH ETF.
- Investors can expect ETH to gain popularity if the meme coin frenzy makes a comeback on the ETH blockchain.
Ethereum (ETH) price has shown no affinity to trend higher and is due to Bitcoin’s (BTC) sideways movement. Since ETH Foundation’s nearly $94 million ETH sale on August 23, Ethereum has shed 14% but currently trades around $2,500.
Top reasons Why Ethereum Price Has Not Hit ATH Yet
- Ethereum price is highly correlated to Bitcoin & BTC is moving sideways.
- Macroeconomic policies affect BTC and, as a result, ETH price.
- Due to the approval of spot Bitcoin ETF, the attention and liquidity have flown to BTC. Additionally, Ethereum is hard to sell to older investors as opposed to BTC, which is considered digital gold.
- Ethereum-killer Solana has attracted many retail investors due to its ease of access, low transaction cost, and high finality.
Macroeconomic Policy and Bitcoin’s Influence on Ether price
The 30-day correlation coefficient between Bitcoin and Ethereum prices hovers around 0.85. This high value represents that movement in BTC price influences ETH price. Therefore, if the pioneer crypto moves sideways, Ether will follow.
Since BTC is also highly sensitive to macroeconomic policies from the West, investors need to pay attention to the US Federal Reserve and its moves.
Spot Bitcoin ETF More Attractive Than Spot Ethereum ETF
Since its inception, spot Bitcoin ETF has seen net positive inflows compared to spot Ethereum ETF. On the contrary, the flows for ETH ETFs are declining, showing a lack of interest from market participants.
This is due to the simplicity of Bitcoin’s narrative, which is digital gold, unlike Ethereum’s world computer. It’s a hard elevator pitch often missed by aged investors who prefer ETFs as their investment vehicles.
Ethereum-killer Solana Siphons Hype From ETH
The 2023 bull run caused meme coins to explode in popularity, and Solana seized the opportunity and overshadowed its competitor and leader, Ethereum. Top meme coins like dogwifhat (WIF), Popcat (POPCAT), Bonk (BONK) are all based on the Solana blockchain and have allowed investors to go from rags to riches in a few days. As a result, many investors left Ethereum for Solana, which also explains the lackluster performance of ETH. Furthermore, these SOL-based cryptocurrencies will likely gain more traction as the bull run progresses due to their recency and popularity.
To conclude, investors need to understand that some of these reasons are why there are no Ethereum price forecasts that hint at a retest of the all-time high (ATH) of $4,093.
Frequently Asked Questions (FAQs)
1. Why is Ethereum price struggling to hit a new all-time high?
2. Will Ethereum price see a short-term spike in bullish momentum?
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