Ethereum’s Market Dominance Sees Significant Decline, Potential Further Drop Forecasted Before Anticipated Recovery by 2025
Over the past year, Ethereum (ETH) has experienced a notable decrease in its dominance within the cryptocurrency market, dropping from 18.85% to 13.36%. This decline has been identified by analyst Benjamin Cowen as indicative of sustained selling pressure on ETH. The struggle to maintain higher dominance levels suggests ongoing challenges for Ethereum in the market.
Historically, Ethereum has encountered obstacles at the 16% and 22% dominance levels, failing to surpass these thresholds since 2018. The current downward trend aligns with a descending triangle pattern, typically associated with a bearish market trajectory.
Analyzing the chart, the upper trendline demonstrates lower highs, while the lower trendline serves as a crucial long-term support level.
Possible Drop to 9-10% Ethereum Dominance?
If the downward momentum persists, Cowen suggests that the next significant support level could lie between 9% and 10% dominance. This projected decline would be driven by a decrease in buying interest within the market.
The established historical support around 9% holds importance for Ethereum, especially if wider market trends do not favor altcoins in the upcoming months.
Should Ethereum manage to hold above this support level, there is potential for its dominance to stabilize and potentially rebound by 2025. However, a breach below the 9% threshold could indicate an extended period of underperformance compared to other altcoins and the overall cryptocurrency market.
Recent Developments in Ethereum’s Price and Market Activity
At the time of writing, Ethereum was priced at $2,542.29, showing a 0.59% increase in the last 24 hours but a 3.11% decline over the past week. Its 24-hour trading volume reached approximately $17.6 billion, indicative of active trading. With a circulating supply of 120 million ETH, its market cap was estimated around $306.29 billion.
Data from DefiLlama revealed that the Total Value Locked (TVL) on the Ethereum network stood at $47.91 billion, alongside daily fees of $3.55 million and revenue of $2.55 million. In the previous 24 hours, inflows to the network totaled about $38.78 million, with the number of active addresses recorded at 372,911.
These combined metrics emphasize the consistent usage of Ethereum despite its diminishing dominance.
Netflow Data Indicates Short-Term Selling Pressure
Recent data from IntoTheBlock displayed a 52.90% increase in the past 7 days and a 28.94% rise over the last 30 days, pointing towards heightened inflows to exchanges. Such a trend often signifies a preparation for selling or profit-taking by traders.
Contrastingly, over a 90-day period, there was a substantial 64,155.88% shift towards net outflows, indicating a long-term trend of investors withdrawing ETH from exchanges.
The surge in short-term inflows correlates with the prevailing bearish sentiment in the market, particularly as more Ethereum is moved to exchanges in anticipation of potential sales.
Conversely, extended net outflows suggest a possible scenario of accumulation as users transfer ETH off exchanges for storage or staking purposes.
In conclusion, while Ethereum may face further short-term declines, analysts anticipate a potential rebound in 2025 based on the current market dynamics.