Headlines for Ethereum in April 2024: Analyzing ETH Price Action
In April 2024, Ethereum (ETH) experienced significant price fluctuations, reaching a high of $3,723 and a low of $2,863. The month also saw negative outflows in Ethereum-based crypto investment products, indicating a shift in investor sentiment. The US Securities and Exchange Commission (SEC) delayed making a decision on spot Ether exchange-traded fund (ETF) proposals, while the Hong Kong Stock Exchange launched spot Bitcoin- and Ether-based ETFs. Ethereum staking reached an all-time high, with over 27.1% of all Ether staked. According to VanEck, Ethereum Layer 2s are predicted to reach a $1 trillion market cap by 2030. Ethereum-based non-fungible tokens (NFTs) experienced a decrease in sales volume compared to March.
What is Ethereum?
Founded in 2013 by Vitalik Buterin, Ethereum is a distributed blockchain computing platform designed for smart contracts and decentralized applications (DApps). It enables users to create and innovate extensively, leading to the emergence of various assets and industries such as decentralized finance (DeFi), NFTs, decentralized autonomous organizations (DAOs), and Web3. Ethereum features an execution engine called the Ethereum Virtual Machine (EVM) and employs a proof-of-stake (PoS) consensus mechanism for scalability and sustainability.
Ethereum Price Performance and On-chain Data Analysis
In April, the price of ETH experienced volatility. It reached a high of $3,723 on April 8 but dropped 30% between April 9 and April 13, hitting a 50-day low of $2,863. Although there was a partial recovery on April 14, the failed attempt to break the $3,200 resistance level indicated further weakness. On April 23, the ETH price rose above $3,200, potentially due to increased demand for Ethereum DApps. The network’s total value locked (TVL) also reached its highest level since July 2022, indicating continued activity in DeFi. However, the lack of clarity on the approval of spot Ethereum ETFs in the US, especially the upcoming SEC decision on VanEck’s proposal, could dampen investor interest. The ETH price dropped again at the end of the month, reaching $3,000. Additionally, Ethereum’s network activity declined in specific metrics compared to March, with a decrease in daily active addresses and daily transactions.
Spot Ether ETFs Face Regulatory Uncertainty
The future of spot Ether ETFs in the US remains uncertain. Ether has underperformed Bitcoin in recent months, and concerns have been raised about possible rejections of US spot Ether ETF applications. The SEC has delayed making decisions on several spot Ether ETF proposals, including Franklin Templeton’s and Grayscale’s. Analysts predict a lower chance of SEC approval for a spot Ether ETF in May compared to a Bitcoin ETF. The regulatory disputes cast a shadow over the Ethereum ecosystem, and recent actions by the SEC, such as considering a lawsuit against Uniswap Labs, have added to the uncertainty. However, Hong Kong has taken a step forward by launching spot Bitcoin- and Ether-based ETFs.
Ethereum Ecosystem Updates
The Ethereum ecosystem continues to innovate in scalability, security, and stablecoins. Ernst & Young launched EY OpsChain Contract Manager (OCM), which uses zero-knowledge proofs to simplify complex contracts. Cryptocurrency exchange OKX integrated with Ethereum Layer-2 solutions to reduce transaction fees. Stablecoin issuer Circle expanded support for its stablecoin, USD Coin (USDC), to Ethereum zero-knowledge layer-2 solution zkSync. Ethena Labs added Bitcoin as collateral to its synthetic dollar-backed stablecoin. Movement Labs secured funding to build a network of Move-based blockchains, aiming to address security vulnerabilities.
Ethereum-Based Protocols and DEXs
The total value locked in DeFi nearly doubled in Q1 2024, reaching a two-year high. Ethereum’s liquid staking innovations, such as Lido and EigenLayer, contributed to this growth. Ethereum staking reached an all-time high, with over 27.1% of all Ether staked. Degen Chain emerged as a new player in the Ethereum scaling race, achieving the highest transaction count per second within the Ethereum ecosystem. Uniswap surpassed $2 trillion in total trading volume, and Puffer Finance raised funding to further develop its platform. A phishing campaign targeting users of Etherscan was uncovered, and a new NFT collection called Doodles announced plans for an animated film.
Ethereum NFTs
NFT sales volumes declined in April compared to March, reflecting broader market trends. Ethereum-based NFTs had a sales volume of $240.8 million in April, a 103% decrease from March. Notable sales included a rare CryptoPunk NFT selling for $12.4 million and Louis Vuitton’s introduction of a varsity jacket with an accompanying NFT. The NFT collection Doodles announced plans for an animated film featuring the voices of Lil Wayne and Coi Leray.
Looking Ahead – Can the ETH Price Go Higher?
April presented a mixed bag for Ethereum, with price volatility and regulatory uncertainties. The Ethereum ecosystem continued to innovate, focusing on scalability, security, and stablecoins. Despite the challenges, the proliferation of Layer 2 solutions and the growing DeFi ecosystem highlight Ethereum’s potential for long-term growth. Security vulnerabilities and scalability issues remain concerns, but efforts are being made to address them. NFT activities saw a decline in sales volume, but notable sales and developments indicate continued interest and adoption.