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Research from Amberdata reveals just a 10% chance of Ethereum surpassing $4,000 by the year-end, citing weak fundamentals as a key factor.
Key Notes
The migration of DeFi activity to Layer 2 solutions has shifted ETH’s deflationary “sound money” narrative.Spot Ethereum ETFs, which initially showed promise from Tup victory, have experienced a slowdown in inflows.Despite this, some analysts remain optimistic, predicting Ethereum could achieve threefold returns.While Bitcoin BTC $91 739 24h volatility: 0.7% Market cap: $1.82 T Vol. 24h: $81.94 B and several altcoins have given close to three-digit percentage returns so far in 2024, Ethereum ETH $3 127 24h volatility: 1.2% Market cap: $376.51 B Vol. 24h: $38.73 B has largely been an underperformer with only 36% gains year-to-date. The world’s largest altcoin has been a laggard in comparison to its peers in the altcoin space.
Bitcoin and most of the altcoins have managed to achieve a new all-time high in 2024. Nevertheless, Ethereum price is still 40% down from its ATH of $4,841 in 2021. This shows that investor interest in Ethereum (ETH) has been lagging big time despite the launch of spot Ethereum ETF this year.
As per the new research from Amberdata, the ETH underperformance is likely to continue further until the end of the year. Furthermore, the data also shows that Ethereum has only a 10% chance of breaching the $4,000 milestone by the year-end, as per the ETH options-based probability density function. On the other hand, traders are rather betting on the Bitcoin price reaching $100K level.
Courtesy: Amberdata
The chart illustrates the Probability Density Function (PDF) and Cumulative Distribution Function (CDF), showcasing the likelihood of Ether trading at different price levels over various timeframes. The data is sourced from Ether options trading activity on Deribit, the leading cryptocurrency options exchange.
Why Ethereum Price Is Not Going to $4,000?
As of now, traders are pricing in only a 10% probability of Ether surpassing the $4,000 mark by the December 27 expiry. This indicates that the anticipated regulatory pivot under Trump’s presidency has yet to significantly boost investor confidence in ETH, despite its positive impact on DeFi-focused tokens.
Furthermore, Amerdata also attributes the poor outlook for Ethereum to its weak fundamentals. In a newsletter to clients, Amberdata’s Director of Derivatives Greg Magadini said:
“ETH faces serious headwinds as the value proposition of “sound money” (aka deflationary supply due to transaction fee burn) has flipped to inflation supply as nearly all DeFi transactions are being executed on L2s as opposed to ETH L1 itself. I believe that’s drastically dragging prices down”.
Apart from this, the inflows into spot Ethereum ETFs have lost steam a week after the Donald Trump victory. Over the last three days, the net flows have turned negative once again.
$ETH: road to $13k
This could be a transformative cycle for #Ethereum.
$10k-$13k is conservative. pic.twitter.com/q3Er9EG9gS
— venturefounder (@venturefounder) November 19, 2024
However, despite this, some market analysts continue to be bullish about Ethereum. Interestingly, they don’t just expect a new all-time high but rather the ETH price giving 3x returns from here onwards.
Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.
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Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.
