Falling Behind Solana...Why Ethereum Keeps Failing to Surpass $2,400

▲ Ethereum (ETH)/ChatGPT generated image

Ethereum (ETH) is stuck in a range, unable to break past the strong psychological resistance level of $2,400, facing a dual challenge of competition from rival networks and regulatory pressure.

Crypto media outlet Cointelegraph analyzed the key reasons why Ethereum remains below $2,400 in a report on May 12 (local time). Recently, Ethereum's price has been stuck in a tedious sideways trend, failing to gain upward momentum. One of the biggest reasons cited is the decline in network activity. The number of active addresses on the Ethereum network has significantly decreased compared to several months ago. Decentralized application transaction volumes are also being pushed back by competing networks, indicating a decline in overall ecosystem vitality.

The rapid growth of competing chains is also narrowing Ethereum's position. Solana (SOL) and BNB are quickly eroding market share in decentralized exchanges and NFT markets, leveraging low fees and fast transaction speeds. Ethereum's chronic problem of high fees is a decisive reason for individual investors to migrate to other chains. While institutional investors' attention is focused on Bitcoin (BTC) spot ETFs, Ethereum has not secured clear buying momentum.

The ambiguous stance of U.S. regulatory authorities also increases market uncertainty. As discussions prolong over whether the U.S. Securities and Exchange Commission (SEC) will classify Ethereum as a security, market expectations for spot ETF approval have also decreased. The dominant view among experts is that it is difficult for large-scale capital to flow in while regulatory risks remain unresolved. This provides a basis for strong selling pressure every time the price approaches the $2,400 resistance level.

The market's supply and demand structure is also not favorable to Ethereum. While Ethereum holdings on exchanges are decreasing, there is a strong possibility that this is due to reduced liquidity resulting from decreased network usage rather than accumulation. Funding rates also remain neutral or low, indicating that traders lack confidence in further upside. Investors appear to be maintaining a wait-and-see attitude until regulatory changes or technological breakthroughs occur, rather than anticipating a short-term rally.

For Ethereum to surpass $2,400, a recovery in network activity and the resolution of regulatory barriers must precede. If it fails to demonstrate a technological advantage that can widen the gap with competitors, the current trend is likely to continue for some time. Market participants are adjusting their positions, closely watching future regulatory guidelines and whether the mainnet's usability improves.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*