- Ethereum reaches $3,000 milestone amidst market fervor.
- ETF specialist Krueger voices skepticism, citing dwindling daily users and sparse real-world applications.
- Advocates counter with Ethereum's thriving Dapp ecosystem, staking mechanisms, and broader market forces.
- Technical analysis reveals resistance at $3,000, with a potential retreat to $2,681 upon rejection.
- Despite short-term fluctuations, optimistic projections foresee Ethereum surging to $3,500 in the near future.
Ethereum has been on a remarkable upward trajectory lately, outpacing Bitcoin in recent days, as depicted by TradingView’s ETH/BTC charts.
On Tuesday, the 21st of February, Ethereum surged to surpass the $3,000 mark for the first time since its dip below this threshold back in April 2022.
Various sectors within the Ethereum ecosystem are flourishing, including but not limited to decentralized finance (DeFi), non-fungible tokens (NFTs), and the eagerly anticipated Dencun upgrade.
Despite this bullish sentiment, skepticism lingers among some observers regarding the rationale behind Ethereum’s rally.
Fred Krueger, a well-known Bitcoin ETF expert and former Wall Street trader, holds the view that Ethereum's current price surge is divorced from reality and anticipates a potential corrective downturn in the near future.
Krueger's primary argument revolves around Ethereum's purported lack of substantial usage. He points to a significant decline in the number of daily active users (DAUs) on the Ethereum network, plummeting from approximately 120,000 in 2021 to around 66,000 in 2024.
Furthermore, Krueger highlights the dwindling DAUs of Uniswap V3, Ethereum's leading decentralized application (Dapp), which has seen a stark decrease in engagement compared to previous years.
This decline in user activity, according to Krueger, raises questions about Ethereum's valuation, likening it to assets like Shiba Inu, which boasts a substantial market capitalization despite limited real-world utility.
However, critics of Krueger's analysis argue that focusing solely on DAUs overlooks the broader dynamics at play within the Ethereum ecosystem.
They contend that Ethereum's value is influenced by a multitude of factors beyond daily user interactions, such as the diversity of Dapps, the impact of staking, and the behavior of large-scale investors ("whales").
Staking, for instance, has seen significant adoption within the Ethereum network, with nearly $40 billion worth of ETH currently staked, a factor that directly affects supply dynamics and consequently price movements.
Moreover, the ecosystem's diversity, spanning various industries including finance, gaming, art, and social media, suggests that different Dapps cater to distinct user bases with varying engagement patterns.
Despite the ongoing debate, technical analysis indicates potential resistance for Ethereum around the $3,000 mark, with bearish pressure evident in the charts.
Should this resistance persist, Ethereum could see a retracement towards its 20-day Exponential Moving Average (EMA), currently situated at approximately $2,681, coinciding with previous support levels.
However, over longer-term timeframes, Ethereum's outlook remains bullish, with the possibility of surpassing $3,500 in the near future.
It's essential to recognize the inherent volatility of cryptocurrencies and conduct thorough research before making any financial decisions. While Voice of Crypto aims to provide accurate information, readers are encouraged to exercise caution and form their own judgments.
