Key Points
Ethereum’s Struggle Against Bitcoin and Competitors
On Friday, November 22, Ethereum (ETH) saw its three-year support against Bitcoin (BTC) falter.
This happened as Bitcoin moved towards its $100,000 target.
In the meantime, Ethereum has been struggling against a resistance level of $3,500 for almost four months.
ETH’s decline against Bitcoin could be attributed to several factors.
These include a decrease in interest from both institutional and retail investors and a shift towards Layer 2 and Layer 3 scaling projects.
Moreover, the Ethereum Spot ETF’s performance indicates a lack of institutional investment.
In contrast, Bitcoin Spot ETF continues to attract billions of dollars in institutional funds.
Solana’s Challenge to Ethereum
In addition to these challenges, Ethereum faces competition from Solana (SOL).
Solana’s market capitalization and price rally have propelled it into the top four cryptocurrencies.
Notably, Solana outperforms Ethereum in terms of transaction volume across decentralized exchange platforms.
Ethereum’s price has seen some increase, but the altcoin still struggles with the $3,500 resistance.
If it fails to break past this level, further gains could be unlikely.
On the other hand, open interest in Ethereum futures has climbed, indicating potential for a bullish trend if the resistance at $3,500 is breached.
Bitcoin’s Dominance
Bitcoin has assumed the role of “digital gold,” used to hedge against geopolitical crises and market unpredictability.
Meanwhile, Ethereum is grappling with scalability issues.
This has led to the rise of Layer 2 and Layer 3 protocols, which have been profitable for traders.
However, Ethereum, despite having a larger market capitalization than Bank of America, has not seen relative gains in the current market cycle.
Ethereum’s Future
The ETH/BTC pair has slipped to a near three-year low, trending downward since September of 2023.
Technical indicators suggest a bearish trend, but the ETH/USDT daily price chart shows potential for gains.
If Ethereum maintains its upward momentum, it could breach the $4,000 mark.
However, a correction could send Ethereum down to test support at $3,000.
Despite these challenges, Ethereum has a strong correlation with Bitcoin.
Therefore, a significant spike in Bitcoin’s price could lead to gains for Ethereum.
However, a correction in Bitcoin could exacerbate Ethereum’s struggle with the $3,500 resistance.