According to recent on-chain data, Ethereum is once again approaching a critical price zone historically viewed as a long-term buying opportunity.
Analysis of Current Ethereum Price Zone
Analysts note that previous ETH bull runs typically began when the asset traded near or below the lower accumulation band. Given Ethereum's current proximity to this zone, there is a possibility the market may be cooling off, indicating a potential new accumulation phase.
Fundamentals Impacting Ethereum
According to an April 16 report from Binance Research, Ethereum's value capture on layer one has weakened significantly since the Dencun upgrade. While this upgrade boosted scalability, the introduction of data blobs increased throughput but greatly reduced L1 fee revenues. An increasing number of users migrating to cheaper and faster layer two solutions has affected ETH's status as 'ultrasound money,' diminishing its competitive edge.
Comparison of Ethereum and Bitcoin
Meanwhile, on-chain data hints at a potential bullish reversal for Bitcoin. An April 13 update highlights the narrowing gap between Bitcoin's futures and spot prices on Binance, which may signal strengthening market sentiment and could precede an upward move in BTC.
In the current situation, Ethereum is at a critical price zone with mixed fundamental signals, presenting interesting scenarios for long-term investors. The future of ETH will depend on further market trends and behavior amid changes in fundamental indicators.
