Is Ethereum dying? Bitcoin eyes $100,000 while ETH struggles under $3,500

Tuur Demeester, Editor-in-Chief of Adamant Research, told Forbes that Ethereum might be “dying a slow death,” signalling the shift in market dynamics and the slowdown in institutional adoptions.

Solana challenges Ethereums dominance, on-chain analysis

While Ethereum ETF performance struggles, the altcoin faces a challenge from its competitor, Solana (SOL). Solanas market capitalization gain and price rally pushed SOL to the top four cryptocurrencies, per CoinGecko.

Top cryptocurrencies by market capitalization | Source: Coingecko

Solana dominates Ethereum in terms of transaction volume across decentralized exchange platforms, DEX activity and protocol fees generated in October 2024 and November 2024.

While Ethereums price has climbed on Thursday and Friday this week, the altcoin struggles with resistance at $3,500, and a failure to break past this level could challenge the likelihood of further gains in the token.

On-chain metrics are inconclusive. While active addresses remain well below mid-August 2024 levels, the funding rate on Binance has been consistently positive since mid-September 2024.

Open interest in Ethereum futures, a metric that gauges interest and demand among derivatives traders, climbed to $10.35 billion, per Santiment data. Statistics from derivatives markets support a bullish thesis for the altcoin. Combined with the recent increase in Ether price, further gains are likely if the altcoin successfully breaches resistance at $3,500.

Ethereum price vs. active addresses, binance funding rate, total open interest in USD || Source: Crypto.news

The ETH/USDT daily price chart shows positive signs for the altcoin. ETH price could observe gains and rally towards the $3,500 resistance and the May 2024 peak of $3,977 if the altcoin maintains its upward momentum.

Ethereum is less than 5% away from the $3,500, and nearly 20% gains could send ETH to test the $3,977 May 2024 peak. RSI is 65, well below the overvalued level above 70. The green histogram bars on the moving average convergence divergence indicator support a likelihood of further gains in Ethereum.

Ethereums underlying price trend is positive, and if the altcoin maintains its steady climb, the $4,000, a psychologically important price level, could be breached in the short term.

ETH/USDT daily price chart | Source: Crypto.news

A correction could send Ethereum to test support at $3,000, a key support level for the altcoin throughout 2024. Further decline would mean Ethereum finds support at the lower boundary of the range at $2,111, as seen on the daily price chart.

Strategic considerations

Ethereum enjoys a strong correlation with Bitcoin, at 0.91, according to Macroaxis.com. This implies that a significant spike in Bitcoin price could be followed by gains in Ethereum and the altcoins price is expected to observe a positive impact.

While Ethereum lags compared to its peers, a correction in Bitcoin could add to the challenges faced by the altcoin in its uphill battle with resistance at $3,500. Traders need to monitor the volume of options and open interest in Ethereum before adding to their positions in ETH.

Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.