Ethereum’s on the Move Again — Here’s What’s Driving Today’s Downward Move
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As the world’s second-largest cryptocurrency, Ethereum’s daily price movements continue to generate outsized interest.
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In the context of a massive weekly move, any sort of tick down in this token’s price could indicate a slowing of momentum.
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Here’s why investors may not want to fret too much about this particular move in the broader scheme of things.
Of all the top cryptocurrencies investors pay close attention to, Ethereum (CRYPTO: ETH) has become one of the best-performing tokens in the market over the course of the past two weeks.
Indeed, since Ethereum’s Pectra upgrade was announced, this token has absolutely taken off. Over the course of the past week alone, Ethereum’s price has surged 45% at the time of writing. Most of this move has to do with the expected improvements to Ethereum’s infrastructure, as well as some rather significant withdrawal data from centralized exchanges (with $1.2 billion being taken off exchange over the past week).
In this context, Ethereum’s 24-hour decline of 2.2% at 3 p.m. ET doesn’t look that significant at first glance. But certainly, any sort of meaningful intraday move will invite questions around how broad and sustained this decline could be moving forward.
Let’s dive into the project’s headwinds and tailwinds to see if we can come to a determination around where this token could be headed from here.
Ethereum has underperformed other major rivals in the crypto sector such as Bitcoin for quite some time, and there are a myriad of investors who will point to this underperformance as reason to avoid holding this token that represents the world’s largest DeFi ecosystem.
However, it’s also true that over certain periods of time, Ethereum has vastly outperformed its larger counterpart. When investors become intrigued by the growth potential of utility-generating crypto projects (most of which continue to be built on top of Ethereum’s infrastructure), this project can skyrocket much higher and faster than Bitcoin.
The project’s recent Pectra upgrade does appear to pave the way for some very compelling advancements in terms of Ethereum’s network growth potential. This upgrade is set to allow for systematic and programmable staking, promoting a more user-friendly experience for those on its network, and (hopefully) driving significantly more activity across its various DeFi applications.
The ability for users to take advantage of smart wallet functionality and staking flexibility is a bigger move than many may think. From my perspective, Ethereum’s recent rally is more than warranted, with today’s move being somewhat of a head-scratcher, given this project’s recent momentum.