Markus Thielen, Executive Director of Research at 10x Research, has highlighted Ethereum’s trajectory, suggesting a possible drop to $2,500. His analysis points to weak fundamentals within the Ethereum network that could not only affect its value but also represent an obstacle to Bitcoin’s progress.
Markus Thielen, Executive Director of Research at 10x Research, has highlighted Ethereum’s trajectory, suggesting a possible drop to $2,500. His analysis points to weak fundamentals within the Ethereum network that could not only affect its value but also represent an obstacle to Bitcoin’s progress.
Ethereum, often touted as the backbone of the decentralized finance (DeFi) and non-fungible token (NFT) ecosystem, has long been considered a cornerstone of the cryptocurrency market. However, in the current cycle, Ethereum remains a basket case.
According to the investigator 10x, Ethereum was the driving force during the 2020/2021 cycle because it was intended to replace the legacy banking system. The minting of NFTs opened new avenues for the acceptance of cryptocurrencies, which may have evolved into other custom roles on the blockchain, resulting in widespread “wallet” adoption. However, Ethereum developers did not respond quickly enough.
The inability of Ethereum developers to react quickly to a major opportunity for the ETH ecosystem and a host of other variables has weighed on Ethereum’s fundamentals, casting doubt on its prospects.
According to Thielen, the implications of Ethereum’s weak fundamentals extend beyond its ecosystem. Thielen points out a high correlation between Bitcoin and Ethereum, with an R-squared of 95%. Ethereum’s weak fundamentals are becoming an obstacle for Bitcoin, preventing large-scale fiat money inflows into the cryptocurrency ecosystem, he claims.
Thielen’s forecast coincides with a period of increased uncertainty and volatility, with the cryptocurrency market under selling pressure. At the time of writing, ETH has fallen 4.32% over the past 24 hours to $2,902, matching the sell-off in the broader cryptocurrency market.
According to Glassnode, amid the hype and market rally surrounding the approval of spot Bitcoin ETFs, Bitcoin holders’ unrealized gains rose much faster than those of Ethereum investors. Bitcoin’s NUPL metric surpassed 0.5 and reached the euphoria phase three months earlier than the equivalent Ethereum metric.
