Key Points
- Ethereum’s underperformance is hindering the flow of money into the cryptocurrency market.
- Long-term holders of Ethereum are moving their coins, suggesting potential selling pressure.
Ethereum’s [ETH] struggle to replicate its past bull market performance is slowing down the influx of money into the cryptocurrency market, according to a report by 10x Research.
ETH’s Weak Fundamentals
The report indicates that Ethereum’s fundamentals have deteriorated, preventing the market from reaching its full potential. Despite expectations for Ethereum to drive adoption, the cryptocurrency has failed to do so.
Furthermore, the high correlation between Ethereum and Bitcoin [BTC] is also negatively impacting Bitcoin. The report states, “Ethereum’s weak fundamentals are becoming a roadblock for Bitcoin as they prevent broad fiat inflow into the crypto ecosystem.”
At the time of the report, Ethereum was trading at $3,128. 10x Research identified the $3,100 region as a critical point for the cryptocurrency, suggesting that if not handled carefully, the price could drop to $2,600.
Declining New Addresses and Coin Circulation
The number of new Ethereum addresses, which tracks unique addresses participating in a transaction for the first time, dropped significantly. This decrease in growth puts Ethereum in a precarious position and could potentially lead to a price slide below $3,100.
Additionally, the one-day circulation of Ethereum has been on a downward trend since March, indicating a decrease in demand for the cryptocurrency. However, this could also mean that the number of Ethereum set aside for selling is low.
Another metric, the Mean Coin Age (MCA), suggests that long-term holders are moving their coins, potentially indicating a desire to sell. This movement could delay Ethereum’s recovery as the price may continue to struggle.
