Ethereum recorded several victories in 2024, with the most noteworthy being the arrival of exchange-traded funds, an asset class that has been long awaited in the crypto world. In terms of prices, though, things have been a little more difficult, as the year started off strong but lost the momentum throughout. This is nothing new since crypto users are aware of the fluctuations and price changes. These events are often unexpected and can cause serious disturbances to the more vulnerable portfolios. Regardless, the general market sentiment remains positive among members of the community, who are convinced evolution is in store.
As a result, many have begun to buy Ethereum with credit card in order to consolidate their portfolios and increase their likelihood of consistent gains. However, it appears that investors still have to wait if they want to enjoy a more stable market environment. The Ethereum marketplace is still in the process of stabilizing itself, and the fluctuations will likely remain significant in the near future.
26%
In spite of the launch of the ETFs in the United States, Ethereum has been underperforming and, during the past thirty days, lost around 26% of its price in one fell swoop. Such movements are not uncommon among crypto users, but that doesn’t make them any less difficult to deal with, and many investors are affected quite a lot. The debut of the new asset class didn’t have the effects investors had been hoping for. The general consensus was that the exchange-traded funds would bolster prices and provide them with the perfect avenue for growth.
The reason for that is fairly simple. Exchange-traded funds operate differently than standard cryptocurrencies, and a user doesn’t need to own them directly in order to interact with the ETFs. This is naturally good news for the environment since it means more engagement from new potential traders who may be reluctant to give cryptocurrencies a try by themselves as a result of their well-known risks. The volatility and relatively elevated likelihood of incurring large capital losses are serious concerns for most investors, both individuals and institutions. The ETFs can remove that threat.
However, it seems now that the reality is fairly different from the initial predictions in the case of the Ethereum blockchain. In fact, some analysts believe that the reason behind Ether’s price decline could actually be the integration and rise of the ETFs. The holdings have a cumulative worth of net outflows exceeding $420 million, gathered quite quickly right in the aftermath of the launch. This has created additional selling pressure, something that naturally affected prices even further.
60,555
Another factor that may have contributed to lowering prices is Ethereum’s growing supply, which climbed to 60,555 coins as of July 23rd. This is the rough equivalent of $155 million, a figure that puts Ethereum at a growth rate of approximately 0.61% per year, at a burn rate of 203,000. However, some researchers point out that the market has been dealing with serious challenges ever since the days of the Dencun upgrade, which went live on March 13th.
Its primary purpose was to reduce the transaction fees associated with layer-2 solutions, as well as enhance the network’s scalability overall. These concerns have become particularly noteworthy in the Ethereum environment over the past couple of years, as the platform became famous for its elevated transaction costs, some of the largest in the crypto ecosystem. The supply has increased by a whopping 197,000 ETH coins since then, but the price fell by 35%.
Setting the stage
Things are never stationary in the crypto space, and that philosophy includes the downswing trends. Even though the prices decrease over a significant amount of time, there’s always the certainty that this is nothing more than a passing trend and that growth is just around the corner. During times of consistent downward movements, investors are even more likely to believe that a significant breakout is in the making and that the corrections are merely a natural step in this scenario.
Currently, the investors and analysts who believe this are convinced that a significant breakout will occur during the first quarter of 2025. However, the more pessimistic ones believe that it’s important to remain cautious instead of fabricating more hype since many were absolutely convinced that 2024 would be the quintessential breakthrough year for Ethereum. It seems now that they were mistaken, as the coin had to deal with further consolidation and losses this year once more.
The ones who believe that 2025 is the year when Ethereum will truly shine say their predictions are based on historical chart patterns, not wishful thinking. Historical data is an essential part of crypto estimations. Although the prices change so quickly and markets tend to be so volatile, trends and movements that occurred in the past have a tendency to repeat themselves in the future. Even if the scenarios are somewhat different, you can still learn from the earlier events and develop better awareness regarding what you need to do in order to increase your chances of success.
According to this belief, the most significant consolidation pattern will occur between November and December, meaning that investors only have a couple months left during which they have to deal with the lowering prices. After the last months of 2024 are over, analysts estimate that growth will start right away, during the first quarter of 2025.
The bottom line
Ethereum is the second-largest crypto in the world based on market capitalization, with only Bitcoin positioned ahead of it. However, that doesn’t mean that it wasn’t affected by price fluctuations and volatility. In fact, Ethereum has been dealing with quite a lot of changes, and even those that were meant to be positive and help the prices evolve turned out to be much less efficient than what investors had hoped for.
Unfortunately, this is common in a riskier trading space such as crypto and arises as a result of the system’s decentralized nature. However, this is also one of the features that made this marketplace all the more attractive for traders. Those who want to be certain that their portfolios are safe and secure must not forget the importance of a sound strategy that allows them to have solid foundations and remain flexible at the same time.
