Ethereum price has moved sideways in the past few days as the recent sell-off ended. The ETH token was trading at $3,150 on Friday morning, down by over 23% from its highest point this year, meaning that it is in a deep bear market.
Ethereum ecosystem is doing well
ETH price action has closely mirrored that of Bitcoin, the biggest cryptocurrency in the world. After initially soaring to the year-to-date high of $4,100 earlier this year, it retreated to $2,850 as Bitcoin moved below $60,000.
Still, there are signs that Ethereum’s ecosystem is doing well. First, a look at the Decentralized Finance (DeFi) industry shows that the network has a TVL of over $99.5 billion.
Its bridged TVL has moved to over $268 billion, which is a substantial sum of money. Further, Ethereum now has stablecoins worth over $83 billion, with most of them being Tether and USD Coin (USDC).
The biggest DeFi platforms on Ethereum are Lido, EigenLayer, AAVE, Maker, and Uniswap. All these networks have over $5 billion in assets,
Lido and EigenLayer have done well as demand for ETH staking has remained high. They both have over $30 billion and $15.7 billion, respectively. Ether staked in Lido yields 3.2% while restaked Ether on EigenLayer has a higher yield.
Read more: Here are the best Ethereum brokers.
Second, Ethereum price has retreated as hopes that the Securities and Exchange Commission (SEC) will approve a spot Ethereum ETF faded. Several companies like Blackrock, Franklin Templeton, and VanEck have all applied for these ETFs.
The key concern among investors is that Ethereum is significantly different from Bitcoin in that the SEC believes that it is a financial security because of its staking features. As such, the agency may reject its application, arguing that it should be regulated.
Third, Ethereum is still the most profitable network in the blockchain industry. Data shows that the network has made $1.3 billion this year. Bitcoin’s network has made $545 million. This means that Ethereum has made more money than Bitcoin, Tron, and Uniswap combined.
Further, despite its high fees and low transaction costs, Ethereum is still seeing more interest from developers. For example, it was selected by Blackrock when it launched BUIDL, its tokenized fund.
Ethereum price forecast
The daily chart shows that the ETH token price formed a small double-bottom pattern at $2,850 earlier this month. This was an important price because it was along the 50% retracement point. It has now bounced back and is slightly above the important psychological level at $3,000.
Ethereum has now moved between the 50-day and 100-day Exponential Moving Averages (EMA). It has also jumped slightly above the 38.2% Fibonacci Retracement level, which is a positive sign.
However, there are signs that the recent recovery is fading. Therefore, the outlook for ETH is bearish, with the next important target to watch being the 61.8% retracement at $2,515. This means that it could retreat by about 20% from the current level.
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