The price of Ethereum has remained in a tight range this month as its ecosystem faces major challenges and increased competition.
Ethereum (ETH), the second-largest cryptocurrency, traded at $3,310 on January 22, about 20% below its November highs. In contrast, Bitcoin (BTC), Solana (SOL), and Ripple (XRP) have recently reaffirmed their high levels.
Ethereum has also continued to lose market share in key areas. For example, Jito has overtaken Ethereum in tax revenue this year, generating $157 million compared to Ethereum's $112 million.
Ethereum is decentralized exchange The volume has also dropped significantly below Solana. Treatment of Solana-based protocols such as Raydium and Orca $123 billion in volume over the past seven days, compared to Ethereum's $26 billion. This increase was largely driven by the popularity of the official Trump and Melania coins.
The price of Ethereum has also been struggling due to ongoing token sales by the Ethereum Foundation and rising exchange balances. According to CoinGlass, these balances increased to 15.8 million ETH, up from 15.3 million on January 1st.
However, there are positive triggers that point to a possible Ethereum price rebound. The spot Ethereum ETF has seen steady inflows, reflecting demand from Wall Street investors. Over the past five days, cumulative inflows rose to $2.74 billion.
In addition, data shows that Ethereum's leverage ratio has been climbing in recent months, reaching 0.6 compared to 0.24 in September 2023. Interestingly , the leverage ratio and the price of Ethereum have diverged, which may indicate additional gains ahead.
Another promising feature is that open interest in the future of Ethereum has increased in the past few weeks. As of January 22, open interest stood at more than $30.3 billion, a significant increase from the December low of $20 billion.
Ethereum price technical analysis
The daily chart shows that Ethereum price met strong resistance at $4,000, which represents the upper limit of the cup and handle pattern. The cryptocurrency currently makes up the handling part of this pattern.
The hand is like a falling piece, defined by two lines of movements descending and coming together. Falling wedge patterns are often bullish and indicate potential gains. Furthermore, ETH has remained above the 200-day moving average.
As a result, Ethereum is likely to experience a strong bullish breakout, with the next target possibly at $4,000, marking a 21% increase from its current level.
