Ether (ETH) price surged by 6.2% from Nov. 3 to Nov. 5, but the altcoin faces difficulty in breaking the $1,900 resistance. Despite the current bullish trend, Ether’s 17% return over the last 30 days falls short of Bitcoin’s (BTC) impressive 27% gain during the same period.
Regulatory hurdles and ecosystem centralization critiques linger
Analysts attribute some of Ether’s underperformance to uncertainty surrounding Consensys, a key player in the Ethereum ecosystem. Former employees have filed a lawsuit against the company and its co-founder, Joseph Lubin. Over two dozen shareholders of the Swiss-based holding company, Consensys AG, claim that Lubin, who is also a co-founder of Ethereum, violated a “no-dilution promise” made in 2015.
Consensys is responsible for developing and hosting infrastructure projects crucial to the Ethereum network. It was founded in October 2014, about nine months before the Ethereum blockchain launched in mid-2015. Furthermore, the High Court of Zug in Switzerland ruled in favor of the plaintiffs, exacerbating the current uncertainty.
Regulatory challenges have hampered the growth of the Ethereum ecosystem. The latest concern centers around PayPal’s U.S. dollar-pegged stablecoin, PYUSD, which operates on the Ethereum network. This token is designed for digital payments and Web3 applications. On November 2, PayPal disclosed a subpoena it received from the U.S. Securities and Exchange Commission (SEC).
In addition to regulatory pressures, there has been notable criticism of the decentralization of financial applications (DeFi) within the Ethereum network. Chainlink, a preferred solution for oracle services, quietly reduced the number of participants in its multi-signature wallet from 4-out-of-9 to 4-out-of-8. Analysts have highlighted the lack of governance by regular users as a significant issue.
Ether’s underperformance to altcoins is an evidence of other issues
Several major altcoins, including Solana (SOL), XRP and Cardano (ADA) have outperformed Ether with returns of 75.5%, 37%, and 35% in the last 30 days, respectively. This discrepancy suggests that the factors holding back ETH are not solely related to regulatory pressure or reduced demand for DeFi and NFT markets.
One pressing issue for the Ethereum network is the high gas fees associated with transactions, including those executed by smart contracts. The latest 7-day average transaction fee was $4.90, negatively impacting the usage of decentralized applications (DApps).
Moreover, the total deposits on the Ethereum network, measured in Ether, have dropped to their lowest levels since August 2020. It’s essential to note that this analysis does not consider the effects of native Ethereum staking.
According to DefiLlama data, Ethereum DApps had a total value locked (TVL) of 12.7 million ETH on November 5, down 4% from the 13.2 million ETH two months earlier. In comparison, TVL on the Tron network increased by 13% during the same period, while Arbitrum deposits remained at 1 million ETH. Data on DApps activity on the Ethereum network supports the notion of reduced activity.
Even excluding the significant 60% decline in the Uniswap NFT Aggregator, the average number of active addresses across the top Ethereum network DApps decreased by 3% compared to the previous month. In contrast, Solana’s top applications saw an average 18% increase in active users during the same period, according to DappRadar data.
Related: Aave pauses several markets after reports of feature issue
Finally, on-chain activity indicates increased user deposits of ETH at exchanges. While this data doesn’t necessarily signal short-term selling, the mere availability of coins is typically viewed as a precautionary measure by analysts.
The present daily ETH deposit average of 255,614 represents a 30% increase from two weeks earlier, indicating that holders are more inclined to sell as Ether’s price approaches $1,900.
The data suggests that reduced TVL, declining DApps activity and a higher rate of ETH exchange deposits are negatively impacting the likelihood of Ether breaking the $1,900 resistance. The price level could be more challenging than initially expected and for now, Ether bears can take a breath.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
Universities in the United Kingdom have started offering cutting-edge research programs, courses and practical experience in various aspects of blockchain technology, including cryptocurrencies, smart contracts, privacy, security and scalability. Students who graduate from these programs will be well-equipped with the knowledge and skills necessary to become leaders in the field of blockchain technology and drive…
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk, you should conduct your own research when making a decision.Market data is provided by the HitBTC exchange.Though institutional players have been dabbling in cryptocurrencies, they are yet…
The partnership will purportedly bring USDC to 2 million users in Chile. 122 Total views 8 Total shares Fintech company Circle announced a partnership with Mercado Libre on Aug. 29 to bring the USD Coin stablecoin to Mercado Pago.1/ The largest fintech in LATAM, @mercadopago, part of Mercado Libre, the Amazon of LATAM with 200M…
Bitcoin (BTC) barely managed to maintain $8,000 support on Nov. 19 as analysts warn the outlook for markets is increasingly bearish. Cryptocurrency market daily overview. Source: Coin360Bitcoin sheds 3.7% overnightData from Coin360 showed BTC/USD bounce off lows of $8,077 on Tuesday, having spent the time since the weekend eroding previous gains. On Monday, a sudden dip took…
Lition, a commercial blockchain, announced on Feb. 18 that Microsoft has officially brought Lition blockchain solution to its Azure cloud marketplace. This makes Lition one of the few public/private blockchains currently supported by a major cloud provider like Microsoft. Microsoft also became the first to bring blockchain to the cloud and continues to remain at the…
A survey from the Financial Industry Regulatory Authority (FINRA) suggests that new crypto investors tended to be swayed by suggestions from friends, compared to equities or bond investors. 139 Total views 2 Total shares Own this piece of history Collect this article as an NFTInfluence from friends and the fear of missing out (FOMO) were…
Bitcoin (BTC) has hit a new all-time high in terms of hash rate despite dropping almost 12% last week, data suggests.According to various resources tracking hash rate growth on the Bitcoin network, the metric was circling its highest value ever as of March 1.Bitcoin network hits up to 136 quintillion hashes per secondHash rate refers…
Turkish Bahçeşehir University (BAU) has reportedly opened a blockchain center at Boston's Northeastern University (NEU) to provide informational support on blockchain technology, Daily Sabah reports on May 7.Apart from informational support, the BAU–NEU Blockchain Laboratory's objective is to apply for funds in the United States, the European Union and Turkey, thus boosting Turkey's presence in the…