Ether (ETH) Price Eyes Sixth Straight Red Daily Candle as $2,500 Poses Stiff Resistance

Market participants anticipated spot Ethereum exchange-traded funds (ETFs) flows to boost ETH's price once they began trading on July 23.

After several attempts to recover above the $2,500 level following the early August crypto sell-off, Ether (ETH) price seems to be headed for its sixth straight day in the red on Friday, encountering stiff resistance at this key price point. Several technical and onchain metrics also hint at a further correction.

ETH/USD daily chart. Source: TradingView

While market participants anticipated that spot Ethereum exchange-traded funds (ETFs) would boost ETH’s price once they began trading on July 23, boosting the second-largest cryptocurrency to new all-time highs, the narrative has failed to materialize.

According to data from Farside Investors, these investment products, which began trading on July 23, saw more than $10.9 million in net outflows on Nov. 1. In total, these products have seen outflows of $478.5 million since their market debut in the United States.

This is concerning, especially since institutional demand was considered a key part of Ether’s appeal in H1 2024, with ETH gains coming two days before the ETFs were approved by the Securities and Exchange Commission on May 21.

This was also reflected across all other Ether products, with the latest Digital Asset Fund Flows Weekly Report by CoinShares showing that flows into Ethereum investment funds remained lackluster in contrast to the bullishness seen in Bitcoin (BTC) and Solana (SOL), with only $9.5 million in inflows during the week ending Nov. 1.

In comparison, institutional investors poured more than $2.1 billion into Bitcoin investment products.

Part of Ether’s failure to sustain a recovery above the $2,500 resistance comes from unmet expectations that ETF flows would mirror those into spot Bitcoin ETFs, which saw BTC price rally to new all-time highs in March.

However, institutional interest in Ether also seems to be waning, with Chainlink (LINK) and Solana seeing greater inflows.

Increasing L1 competition, slowing DApp activity on Ethereum

While a fraction of activity has moved to Ethereum layer-2 solutions, some users and developers are opting for other top layer-1 alternatives such as the BNB Chain (BNB), Solana and Tron (TRX).

As a result, Ethereum’s network activity growth has fallen behind its rivals as more users opt for lower-fee ecosystems.

Top blockchains ranked by 24-hour DApps volume, USD. Source: DappRadarFor instance, Ethereum’s unique active wallets engaging with decentralized applications on the platform declined by 16% over the last 30 days compared to a 19% increase on Solana and a 75% increase on Avalanche.

Similarly, the total volume transacted on the Ethereum network dropped by 9.6% during the same period, while the volume on the BNB Chain, Solana and Avalanche increased by 1.5%, 10% and 60%, respectively.

This lackluster performance in attracting and retaining users and activity is also reflected in decreasing market share.

Ether's market dominance continued its downturn in 2024, hitting a 42-month low of 13% on Nov. 4, indicating that the largest altcoin by market capitalization is losing market share to Bitcoin and other altcoins.

TradingView chart showing ETH dominance hitting 3-year lows on Nov. 4, 2024.

According to popular crypto analyst Max Price, this lackluster performance and decreasing market share could be a problem for ETH traders, adding that it “looks like it's slowly slipping away.”

Meanwhile, fellow analyst The Great Martis is sounding the alarm that ETH's chart is showing “bearish tendencies” with a possible downward breakout to areas below $1,000.

A chart posted by the analyst on Nov. 2 shows ETH price in a descending triangle formation, hinting at a possible downward breakout. Notably, technical analysis charting patterns are not always reliable and traders should always perform their own research before making any trades.

A chart posted by crypto analyst The Great Martis on Nov. 2 shows ETH price in a descending triangle formation, hinting at a possible downward breakout. Notably, technical analysis charting patterns are not always reliable and traders should always perform their own research before making any trades.

This article is for informational purposes only and not intended as investment or financial advice.