Ethereum Faces Headwinds: Whale Dump, Key Departure, Pectra Hard Fork Delay - Short-Term Bearish for ETH?Ethereum has been facing a challenging period lately, with DeFi developers clashing with Vitalik Buterin, and numerous community members expressing their dissatisfaction with the ETH founder, urging him to leave his girlfriend and focus on driving prices up. However, amidst these challenges, Ethereum experienced a significant rebound fueled by the Federal Reserve's recent interest rate cut, surging from below $2400 to $2500, even briefly surpassing $2600, bringing joy to many holders
Ethereum Faces Headwinds: Whale Dump, Key Departure, Pectra Hard Fork Delay - Short-Term Bearish for ETH?
Ethereum has been facing a challenging period lately, with DeFi developers clashing with Vitalik Buterin, and numerous community members expressing their dissatisfaction with the ETH founder, urging him to leave his girlfriend and focus on driving prices up. However, amidst these challenges, Ethereum experienced a significant rebound fueled by the Federal Reserve's recent interest rate cut, surging from below $2400 to $2500, even briefly surpassing $2600, bringing joy to many holders.
Whale Dump Sparks Community Discussion
Just as Ethereum broke through the $2600 mark, a highly successful Ethereum whale chose to sell off their holdings, sparking lively discussions within the community. Monitoring data revealed that the whale sold approximately 15,000 ETH, acquired in September 2022 at $1567, realizing a profit of $38.37 million.
It's noteworthy that over the past six months, during the Federal Reserve's "rate cut preparation period", this whale has made several strategic moves, selling over 70,000 ETH with an average selling price of $3,062, resulting in a total net profit of $100 million, highlighting their expertise in recognizing market tops. The whale currently retains 26,638 ETH, and their future actions warrant close attention.
Key Personnel Departure, Pectra Hard Fork Postponement
Beyond the whale dump, Ethereum has encountered other negative news recently. Last week, Danny Ryan, a core member of the Ethereum Foundation responsible for leading the Merge, announced his departure, signifying a significant loss for Ethereum development. Upon leaving, Ryan urged the community to "focus on developing core values rather than chasing numbers and prices; this is the path to Ethereum's success."
Furthermore, the Ethereum Dencun upgrade did not deliver the anticipated positive impact on price. Consequently, numerous Ethereum supporters eagerly awaited the upcoming Pectra hard fork, hoping for better news. However, based on the conclusion of the Ethereum Core Developers meeting last Thursday, the Pectra hard fork, due to technical challenges, cannot be implemented in a single upgrade and will instead be divided into two stages.
The first upgrade, scheduled for early 2025, will include eight proposals, including EIP-7702, aimed at enhancing wallet user experience, but these represent minor improvements and not the core features of the Pectra hard fork. The second stage, which is the main focus and the reason for the Ethereum core team's cautious approach, will introduce the EOF proposal to enhance the Ethereum Virtual Machine (EVM) and integrate the PeerDAS functionality, improving sampling usability and potentially boosting Layer 2 call efficiency and versatility. However, the precise timing of the second upgrade remains undetermined, with only a statement that it will occur as soon as possible after the first stage, pending evaluation.
Bitcoin Inflow, Ethereum Outflow
This week, U.S. spot Bitcoin ETFs witnessed a net inflow of 6,578.89 BTC (approximately $414 million), while spot Ethereum ETFs recorded a net outflow of 11,461.21 ETH (approximately $29.66 million).
Can Ethereum Reverse the Trend?
As the year nears its end, Ethereum's lagging performance may see a reversal. So far this year, Ethereum has remained virtually unchanged, while Bitcoin has surged by 38% and Solana has climbed by 31%.
Ethereum's recent underperformance stems from risks associated with the November U.S. presidential election, intensifying competition from Solana and other blockchains, challenges in token economics, and mixed reactions to the potential launch of spot exchange-traded funds (ETFs) in the U.S.
Despite these obstacles, Ethereum boasts the most active developers, the largest user base, and a market cap five times larger than its closest competitor.
ETH Poised for Renewed Growth
Ethereum's (ETH) recent period of underperformance may be coming to an end, potentially favoring ETH both in terms of fiat exchange rates and BTC valuations. During the previous altcoin season, ETH experienced a significant surge, with the ETH/BTC ratio doubling within just two months. This shift was fueled by a surge in on-chain activity, including the rise of decentralized finance (DeFi), stablecoin issuance, and non-fungible tokens (NFTs), all primarily occurring on the Ethereum blockchain.
Rate cuts will lead to increased on-chain activity, offering substantial benefits to Ethereum.
In Conclusion
Although Ethereum faces headwinds like whale selling, key personnel departures, and the delayed Pectra hard fork, the underlying fundamentals remain strong, suggesting a potential resurgence. With favorable conditions generated by rate cuts and the increasing on-chain activity, Ethereum is poised for renewed growth.
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