As a seasoned crypto investor with a decade of experience under my belt, I can’t help but feel a sense of déjà vu when observing Ethereum’s current price action. It seems like we’re stuck in a familiar dance with Bitcoin, where one moves, and the other follows suit – albeit with a slight lag.
The price of Ethereum (ETH) appears to lack a tendency to increase, and it’s likely because Bitcoin (BTC) is moving sideways. After the sale of nearly $94 million worth of ETH by the Ethereum Foundation on August 23, Ethereum has dropped by about 14%, but it’s currently trading around $2,500.
Top reasons Why Ethereum Price Has Not Hit ATH Yet
- Ethereum price is highly correlated to Bitcoin & BTC is moving sideways.
Macroeconomic policies affect BTC and, as a result, ETH price.
Due to the approval of spot Bitcoin ETF, the attention and liquidity have flown to BTC. Additionally, Ethereum is hard to sell to older investors as opposed to BTC, which is considered digital gold.
Ethereum-killer Solana has attracted many retail investors due to its ease of access, low transaction cost, and high finality.
Macroeconomic Policy and Bitcoin’s Influence on Ether price
In simple terms, there’s a strong connection between the daily price fluctuations of Bitcoin and Ethereum, with a correlation coefficient of about 0.85. This means that changes in the price of Bitcoin often influence the price of Ethereum as well. So, if Bitcoin stays stable or moves only slightly, you can expect Ethereum to do the same.
Given that Bitcoin’s value can be significantly influenced by economic policies from Western nations, particularly the U.S., it’s essential for investors to closely monitor decisions made by the Federal Reserve in the United States.
Spot Bitcoin ETF More Attractive Than Spot Ethereum ETF
From their start, Bitcoin Spot ETFs have consistently attracted more funds than Ethereum Spot ETFs. Conversely, the flow of funds into Ethereum ETFs has been decreasing, suggesting a diminished level of engagement among investors.
The straightforward nature of Bitcoin’s concept, being likened to digital gold, stands out against Ethereum’s more complex “world computer” idea. This is a succinct summary that many experienced investors, who tend to favor ETFs as their investment tools, may overlook.
Ethereum-killer Solana Siphons Hype From ETH
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In summary, it’s crucial for investors to realize that certain factors explain why predictions for Ethereum’s price don’t suggest a return to its record high of $4,093.
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2024-09-03 14:02