For Ethereum enthusiasts, these are somewhat tense times as ETH prices face bleak risks of losing the $1.6K support. Despite a 31.3% surge in price between March 10 and March 18, opinion is turning sceptical about the cryptocurrency’s potential to maintain this upward momentum. This struggle occurs in an ecosystem troubled by declines in several crucial ETH price metrics and negative market developments.
On one side of the coin, the recent injection of $300 billion by the U.S. Federal Reserve bolstered the crypto market for a while, in tune with the Silicon Valley Bank’s insolvency. ETH price continued to hold a daily closing price above $1,600, attracting investor interest.
However, the other side reveals a bearish sentiment stemming from the Digital Currency Group (DCG)’s financial woes, which currently owns the Grayscale mutual fund manager. The dread of a possible liquidation of a chunk of the $4.8 billion worth of ETH deposits held in the Grayscale Ethereum Trust looms large. Moreover, two significant global exchanges, Binance and Coinbase, find themselves tackling legal action from the U.S. Securities and Exchange Commission (SEC).
Ethereum’s on-chain metrics don’t paint a promising picture either. The number of Ethereum addresses holding a minimum of $1,000 worth of ETH deposits is at its lowest in six months, sparking concern. Declining smart contract transactions and stagnant investor interest, thanks in part to Ethereum’s high average transaction fee, further muddle the situation.
Simultaneously, there’s a dip across sectors in the number of active users on decentralized application (DApps) activity on the Ethereum network, barring exceptions like stablecoins and wrapped ETH.
Meanwhile, Ethereum’s competitors aren’t resting idle. The payment processor, Visa, has now integrated Solana blockchain settlement capabilities. Circle USD (USDC) initiated native accounts and transfers on the Base chain, with Coinbase exchange promptly planning to convert old, bridged versions of USDC to the new format.
With the predominant sentiment in the crypto market leaning towards the bearish, as well as dwindling interest among investors, the specter of ETH‘s price dropping under the $1,600 support level indeed seems ominous. Thus, without a significant increase in on-chain activity and amidst looming legal issues of exchanges, ETH‘s journey ahead seems lined with challenges.
Source: Cointelegraph
