Ethereum has followed Bitcoin‘s trajectory and has registered a new 10% correction in the daily chart. The top cryptocurrencies have suffered for the past week. Fear and uncertainty seem to be driving market participants.
At the time of writing, ETH trades at $2,270 with red across all charts. The cryptocurrency was rejected after it briefly breached the $2,800 area. During yesterday’s trading session, the rejection was followed by a dropped in Bitcoin and ETH quickly follow.
ETH on a downtrend in the daily chart. Source: ETHUSD Tradingview
The cryptocurrency sits at critical support with the potential for more downside if the bulls can’t contain the bears around current price levels. Selling pressure is high. Data provided by analysis firm Jarvis Labs indicates around 18:00 UTC more than 177,900 ETH entered Binance exchange.
A large number of Bitcoin inflows was recorded as well. Approximately 4,500 BTC entered Binance around 10:00 UTC. For both cryptocurrencies, there were additional inflows in smaller since. Ethereum inflow saw around 10,900 and 13,500 between midnight and 19:00 UTC.
Source: Jarvis Labs
ETH inflows to exchange platforms have reached yearly highs during May. Additional data provided for CryptoQuant suggest that on May 19th and 23rd, Ethereum dropped from its all-time high was preceded by a surge in inflows. As the chart below shows, ETH’s price has been trying to recover, but the selling pressure has been relentless.
Why Ethereum Still Have Upside Potential In 2021
Although the short term could be dominated by the bears, ETH has much potential with Hard Fork “London” and the introduction of EIP-1599, Ethereum 2.0, and its future updates. Also, this platform host three of the most successful narratives and sectors over the past years: Non-Fungible Tokens (NFTs), DeFi, and the store of value against inflation.
The EIP-1599 will make ETH a deflationary asset. Therefore, many believe it will be a better hedge against inflation and a better version of digital gold than Bitcoin.
Earlier this week, a leaked report by banking giant Goldman Sachs predicted that Bitcoin will lose this race to Ethereum. The report called Ethereum’s network the “Amazon of Information” and stated that it has a “higher chance” of becoming the “dominant” store of value over gold and BTC.
The full report has been published by Goldman Sachs with interviews with important personalities in the crypto industry. One of them is Mike Novogratz, CEO of Galaxy Digital Holdings. He claimed that ETH will support a global system adopted by many people. They will leverage payments, DeFi, and NFTs, Novogratz said:
The three biggest moves in the crypto ecosystem—payments, DeFi, and NFTs—are mostly being built on Ethereum, so it’s going to get priced like a network. The more people that use it, the more stuff that gets built on it, and the higher the price will ultimately go.