Ether (ETH) price has been under pressure since June 7, when it lost support at $3,800. Despite a series of positive developments, its price remained below $3,600 on June 19, with no change over the past week.
Some analysts believe that the main reason for the bearish price momentum is the lack of institutional demand for cryptocurrencies. Others cite regulatory uncertainty in the Ethereum ecosystem as the cause.
Risks in the Ethereum ecosystem exist despite verification from the SEC
Noelle Acheson, author of the newsletter ‘Crypto is Macro Now’, expressed surprise at Ether's lack of positive momentum following Consensys' victory against regulators. She also questioned whether other legal issues related to staking may be deterring investor interest.
On June 18, Ethereum ecosystem developer Consensys announced that the United States Securities and Exchange Commission (SEC) has concluded its investigation into whether Ethereum can be considered a security and the role it plays. The company's role in selling ETH. Consensys sued the SEC in April after receiving a Wells notice, warning that its MetaMask wallet may have violated securities laws.
Ether's decline coincided with Bitcoin, the leading cryptocurrency, encountering rejection near $72,000 on June 7. This comes as investors worry about the financial health of the United States , exacerbated by high interest rates and deteriorating economic indicators such as rising wages and rising unemployment. In May, U.S. average hourly earnings increased 0.4% from the previous month, while the unemployment rate increased to 4.0% from 3.9% in April.
While there may be benefits for cryptocurrencies from deteriorating macroeconomic conditions in the medium to long term, history shows that investors tend to retreat from risky assets when a downturn threatens. become close. The yield on 2-year U.S. Treasuries fell to 4.71% from 4.94% on May 30, showing that investors are actively buying these fixed income instruments.
Dan McArdle, co-founder of Case4Bitcoin, noted that as long as the macroeconomic environment is stable, the cryptocurrency appears to be reasonably valued and its long-term bullish trend should continue. However, McArdle warned that a “macro shock” or sharp correction in the S&P 500 would negatively affect cryptocurrencies in the short to medium term. Therefore, the current lack of interest in Ether may reflect increased concerns among investors about the risk of a potential recession.
Recession risks and lack of demand for spot Ethereum ETFs
In addition to Consensys' recent developments, regulatory news for Ether is positive. SEC Chairman Gary Gensler confirmed that the launch of spot Ethereum ETFs in the United States will take place within three months. However, Ethereum faces its own challenges, including persistently high network processing fees, which have surpassed $4 in the past week.
Despite the growth of layer 2 scaling solutions such as Optimism, Base, Arbitrum and ZKSync, some decentralized application volume has migrated to competitors such as Solana, BNB Chain and THORChain.
Top blockchains ranked by 30-day DApps volume, USD | Source: DappRadar
According to DappRadar, Ethereum remains the leader in DApp volume over the past 30 days, but is facing fierce competition. Competitors like Solana, Aptos, Celo and Fantom have outpaced its growth. Additionally, the number of active addresses interacting with DApps on the Ethereum network has decreased by 40% in the past 30 days, while Solana and Aptos increased by 58% and 115%, respectively.
Ether fails to surpass $3,600, despite the launch of a spot ETF and SEC regulatory clarification that ETH is not a security, including deteriorating macroeconomic conditions and related potential uncertainties to additional regulatory charges against token issuers, wallet providers and exchanges – a risk highlighted by Noelle Acheson.
Finally, the recent four-day streak of net flows from spot Bitcoin ETFs raises concerns about whether Ethereum instruments will attract significant inflows when they are launched. Investors are concerned that Grayscale's Ethereum Trust (ETHE) could experience capital outflows when it is converted to an ETF, similar to the issues that affected GBTC due to high fees.
Source: https://tapchibitcoin.io/gia-ethereum-eth-khong-tang-du-co-tin-tot-day-la-ly-do-tai-sao.html