ETH Price Drops Below $2,800 Amid 24.5% Monthly Decline
Ethereum price has struggled to maintain the $2,800 level after a significant drop on February 3. Over the past month, it has decreased by 24.5%, underperforming compared to the broader market decline of 10%.
Key points include:
- Concerns about Ethereum's momentum and ability to reach $3,400.
- Institutional interest persists through spot Ethereum ETFs despite bearish sentiment.
- Traders favor short positions in futures markets, indicated by a lower long-to-short ratio.
- Futures premiums remain above the bearish threshold of 5% despite recent crashes.
- Investors are cautious ahead of the upcoming ‘Pectra’ upgrade, with unclear benefits for users.
- Increased competition from blockchain projects like Solana and HyperLiquid is affecting Ethereum's dominance.
- Criticism regarding Ethereum’s monetary policy and scalability discussions within the community.
- Supply has increased at an annualized rate of 0.5%, reflecting weak demand as Layer-2 solutions reduce fees.
- Internal conflicts within the Ethereum Foundation may impact investor confidence.
- Despite these challenges, institutional activity remains strong, with a net inflow of $487 million into US spot Ethereum ETFs since January 30.
- World Liberty Financial invested $10 million in Ethereum, holding 66,239 ETH valued at $182 million.
- For Ethereum to reclaim $3,400, improved confidence in staking rewards and scalability is essential.
Ethereum currently maintains a strong position in the DeFi sector, but faces both risks and opportunities moving forward.