Ethereum Price Analysis: 7-Month Downtrend Still Unbroken Ethereum Price Analysis: ETH Stays Bearish for 7 Months
Ether (ETH) has experienced a steady decline over the past 7 months, dropping more than 36% from its yearly high of $4,111 in March 2024 to $2,600 as of mid-October. This prolonged downtrend highlights Etherâs ongoing challenges as competition in the Layer-1 (L1) blockchain space intensifies, leading to concerns about Ethereumâs future position in the market.Ethereum Losing Ground in Layer-1 Competition.
The growing competition among top blockchain networks is a key factor behind Ether's sluggish performance. Analysts have pointed out that Ethereum is no longer dominating the so-called âL1 wars,â where blockchain projects -like Solana, Avalanche, and Fantom are competing to balance security, scalability, and decentralization. Pseudonymous crypto analyst Ignas noted that Ethereumâs value accrual from Layer-2 (L2) solutions remains unclear, allowing ,, other L1 networks to emerge as strong contenders in the blockchain space.Solana's Rise at Ethereumâs Expense.
One of the most significant challengers to Ethereum is Solana (SOL), which has gained market share due to its monolithic scalability approach. As more Ethereum L2 solutions are launched, liquidity and user experience become increasingly fragmented. This fragmentation has caused some investors to shift their holdings from ETH to SOL, which is -perceived to offer a more streamlined blockchain solution. Over the past year, Solana has seen a remarkable 552% increase in value, far outpacing Etherâs 57% rise during the same period.
Potential Ether Price Correction Ahead.
Technically, Ether may be headed for a further price correction. Crypto trader Justin Bennet suggested that ETH could be forming a diamond reversal pattern on its one-hour chart, with the potential to correct to around $2,485 if the pattern confirms. Despite this, the broader cryptocurrency market remains under pressure, with Bitcoin also facing challenges in breaking its long-term downtrend, adding further uncertainty to Etherâs short-term outlook.
In conclusion, Etherâs (continued) decline amid fierce competition and market fragmentation raises questions about its future dominance in the crypto space.