**Crypto News Analysis: Understanding Ethereum’s Price Challenges – Insights from Coinbase Analysts**
What accounts for Ethereum’s (ETH) price lag compared to Bitcoin? What changes are necessary for a potential increase? Here are some insights.
**Author:** Mete Demiralp
**Date:** 12.09.2024 – 19:39
**Update:** Just now
According to a recent analysis from Coinbase, Ethereum is currently falling behind its counterparts, largely due to overarching market dynamics following the deleveraging events of August. The decline in network engagement and inflation of tokens are contributing factors; however, the predominant issue seems to be the existing framework of the cryptocurrency market, as highlighted by Coinbase’s Global Head of Research, David Duong.
In his report, Duong pointed out that many investors are currently gravitating towards altcoins and other investments that are proving increasingly challenging to liquidate. This trend is constraining the capital flow within the broader crypto landscape, particularly impacting networks like Ethereum. “The market is being driven by cryptocurrency enthusiasts who are focusing on altcoins and positions that are hard to exit,” Duong stated. He emphasized that for Ethereum to regain its momentum, a new catalyst is essential to spark renewed interest from both developers and investors.
The report further indicated that Ethereum is lacking fresh narratives and is under more scrutiny compared to other smart contract platforms. Its performance has trailed behind major crypto competitors, recently registering at 1.6 standard deviations below its three-month average, which signals a growing underperformance.
Moreover, Ethereum’s Total Value Locked (TVL) has seen a decline, dropping to $44 billion—its lowest since February—down from $67 billion in June. Duong stressed that Ethereum requires a significant catalyst to halt its current downward trajectory, especially since both traditional and cryptocurrency markets have remained relatively subdued.
While the introduction of Ethereum-based spot ETFs could potentially elevate ETH prices, institutional interest has predominantly been directed towards Bitcoin products thus far. “We believe that many traditional investors are overlooking the deeper understanding of Ethereum’s supply chain and the utility of its smart contracts,” Duong remarked.
*Please note: This is not investment advice.*
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