Originally published on: October 17, 2024
Ether, the world’s second-largest cryptocurrency, has been caught in a downtrend for the past seven months due to intensifying competition among leading blockchain networks. The price of Ether has plummeted by over 36% since reaching a yearly high of $4,111 in March 2024, currently sitting at $2,600, as reported by Cointelegraph data.
The ongoing battle for supremacy in blockchain innovation, particularly in the realm of layer-1 (L1) technology, is cited as a key factor contributing to Ether’s stagnant price performance. Pseudonymous crypto analyst Ignas highlighted the significance of Ethereum losing ground in this L1 war, emphasizing the potential for alternative networks to thrive in varying use cases.
The fierce competition among top blockchain networks, including Ethereum, Solana, Avalanche, and Fantom, revolves around solving the blockchain trilemma: achieving a delicate balance between security, scalability, and decentralization. Ethereum’s ecosystem fragmentation, exacerbated by the emergence of L2 networks, has diverted investment towards native currencies within these networks, making monolithic blockchains like Solana an appealing alternative for investors.
While Solana has significantly outperformed Ether in terms of price performance, rising by over 552% in the past year compared to Ether’s 57% increase, it too remains ensnared in a seven-month downtrend resembling Ether’s trajectory. Technical analysis suggests that Ether could potentially see a correction above the $2,400 mark, signaling a possible shift in its price momentum.
In a parallel struggle, Bitcoin is also grappling with breaking free from its 217-day downtrend, further adding pressure to the broader cryptocurrency market. As the competition heats up among blockchain networks, the landscape of the crypto industry continues to evolve, presenting both challenges and opportunities for investors and traders alike.
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