Ethereum Is Down 30% From 2024 Highs: Why Is This Analyst Super Bullish?

While Ethereum struggles to regain the Q1 2024 momentum, currently tethered close to the psychological $3,000 level, one trader remains bullish.

Taking to X, the analyst posts several reasons to negate concerns by skeptics even with the coin trading 30% from March 2024 highs when prices broke above $4,000. By this take, doubts about future gains could be unfounded as they paint an overly pessimistic outlook for the second most valuable cryptocurrency. 

Ethereum Is Under Pressure: Here’s Why

Ethereum is in a bearish breakout formation at press time following sharp losses in mid-April. Although there are hints of strength, the rejection from $2,800 wasn’t enough to assuage fears. 

As prices range within a $500 zone capped at $2,800 and $3,300, bulls have a chance, though sellers could also press lower, continuing the losses of April.

There are multiple reasons to support the bearish forecast. Some investors, the analyst observes, are still hesitant to get exposure to ETH because of Bitcoin and its swelling layer-2 ecosystems. 

The launch of the Runes Protocol saw activity flow to Bitcoin, pushing transaction fees on the world’s most valuable network. Trading fees have fallen, as seen on YCharts on May 10.

Beyond this, there are concerns that the United States Securities and Exchange Commission (SEC) might classify ETH as a security, leading to stricter regulations. Moreover, Solana, a modern high-throughput blockchain, is seen as a stiff competitor considering its surge in activity, mostly from meme coin projects. 

Analyst: Here’s Why ETH Will Rise

Though the threat from Solana and other low-fee and scalable platforms, on top of the United States SEC concerns, is real, the analyst is upbeat. Explaining in a bid to dismantle cause for worry, the analyst dismisses the Bitcoin layer-2 ecosystem as “trash.” Though popular, the analyst thinks it will always be inferior to Ethereum’s in functionality and practicality. 

Beyond this, the analyst adds that though the United States SEC threat exists, it’s unlikely to be successful. Even if it is, powerful political and economic forces like Wall Street will continue to support Ethereum’s growth.

Thus far, Wall Street players like BlackRock have expressed interest in issuing spot Ethereum exchange-traded funds (ETFs), which has boosted confidence.

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Moreover, the analyst downplayed Solana’s strengths, suggesting its scalability and growth might be exaggerated.

Specifically, the analyst noted the existence of equally superior layer-2 scaling solutions for the Ethereum-like Base. From a security perspective, Solana also has limited client diversity, negatively impacting the network reliability.