Ether has not been able to overcome the psychological resistance point of $ 2000 for a long time.
Although the value of the native token of the Ethereum ecosystem has increased by 35% since the beginning of 2023, it has not managed to rise above $ 2000.
Let’s take a closer look at the reasons why the Ether price has not exceeded $2,000 since May 2022.
Similar to 2018 and 2019
Ether’s failure to exceed $2,000 in 2023 is similar to the asset’s downward trend around $425 in 2018 and 2019.
In both cases, Ether is trading above the 0.236 Fib line of the Fibonacci retracement chart and appears to be in a recovery phase.
In 2018 and 2019, the 0.236 Fib line was near the $425 level, which was effective in limiting Ether’s recovery attempts. It seems that in 2023 the same line will be close to $ 2,000 and will strengthen as a sales area again and play a role in decreasing the price of Ether.
The strength of the US dollar and Bitcoin
The strengthening of the US dollar has led to a decrease in demand for Ether recently.
The negative correlation of the dollar with the largest cryptos in terms of market capitalization is seen as the main factor.
However, Ether also underperformed due to spot Bitcoin ETF excitement. The ETH/BTC pair has fallen 20% since the beginning of 2023.
Drop in network activity
TVL on Ethereum decreased from 18.41 million Ether to 12.79 Ether in 2023. According to JPMorgan analysts, this means reduced fund availability, which means lower returns for investors.
Along with TVL, Ether gas fee also decreased, reaching its lowest level of the year on October 5.
At the time of writing, Ether is trading at $1,636, according to CoinGecko data.
