Ethereum, the brainchild of Vitalik Buterin, has evolved from a determined second-place player into a formidable contender for the cryptocurrency throne. Currently, there are over 100 million ETH coins in circulation, with 85 million already issued, a factor that often impacts the ETH USD exchange rate. Everybody knows Ethereum is the second largest cryptocurrency after Bitcoin (BTC). But what makes it so special?
Created as a decentralized platform for processing transactions and storing information based on blockchain technology, Ethereum tech forms the basis of many popular distributed apps (dApps). Picking through the Ethereum ecosystem grants you immediate access to the most cutting-edge decentralized finance (DeFi) tools out there and more.
Unlike Bitcoin, which functions solely as a cryptocurrency, Ethereum offers a platform for developing and implementing various decentralized services. The platform supports creation and execution of smart contracts, which are code elements that auto execute when initiated, letting buyers and sellers complete transactions in a fully decentralized system. Smart contracts have a wide range of applications, such as automating financial transactions, controlling data access, performing calculations to arbitrary precision, etc. Numerous tokens are already based on this system, and there are many more to come — all thanks to scalability opportunities, such as sharding and segmentation, that enable higher transaction throughput.
Many decentralized applications and games have already been launched on Ethereum, and their number is predicted to continue growing. However, recent news has been somewhat negative, leading to a rapid price decline.
The launch of Ethereum futures ETFs failed to generate the same level of excitement and trading volume as the first BTC futures ETF. Trader activity has been waning in recent weeks, resulting in minimal transaction fees on the network, the lowest since the end of 2022. Additionally, the Ethereum Foundation has swapped 1700 ETH for $2.73M USDC, which marked their largest single transaction of the year. And caused a noticeable drop in the price of ETH USD.
It’s likely that the foundation opted to convert the sale proceeds into USDC stablecoins to secure profits and safeguard the received funds amidst the cryptocurrency market’s instability. However, these defensive actions have accelerated the cryptocurrency’s ongoing decline, pleasing bearish investors with the potential for further decreases.
The support around 1550 is currently undergoing testing. As long as it holds, there’s still a chance for bulls to maintain the price in the current range near 1600. However, if this support breaks, the next one at 1500 is unlikely to stall the fall, potentially leading to a drop to 1300. Considering the overall market sentiment, this may happen by the end of this year.
There’s always a possibility for bulls to face a turnaround if the SEC finally approves the ETF and the market does not lose interest in cryptocurrency derivatives. In essence, the market sentiment is crucial for them now to retain their positions. In any case, the primary resistance level remains at 1750, which has previously bounced the price. The next significant level would be 2000, which holds more of psychological than technical significance, recalling the market hysteria during its breach in the May collapse.
Also read: Ethereum and Digital Asset Funds
