Ethereum Price Rises, But Why the Weak Momentum? What’s Happening to ETH?

Summary:
• Ethereum price has failed to keep pace with its peers in recent days, creating concerns that it could underperform despite the current rally.

Ethereum price got back to the upside on Thursday as it rose by 2.3 percent to $3,144 at the time of writing. ETH has struggled to keep pace with its peers during the current crypto market and recorded losses in the last two successive days. For instance, while Bitcoin has gained 7.6 percent in the last week, Ethereum lost 2 percent of its value during the same period.

Due to its recent underperformance, Ethereum price trades marginally above the 10-period Exponential Moving Average (EMA) of $3,099. This signifies a weak upside momentum that could lead to a whipsaw trading pattern during the current market rally.

The DeFi link to Ethereum’s underperformance

Ethereum’s decline during the current market rally is reflected in its DeFi underperformance. The Ethereum DeFi chain has registered a paltry 1.7 percent TVL growth in the last week, compared to peers like Solana, Sui and Cardano, which have seen double-digit growth.

Curiously, however, Ethereum price has not kept pace with its dApp volumes, which have grown by almost 40 percent in the last month. This is attributed to its scalability challenges and high transaction fees, which have locked out most retail investors.

Therefore, Ethereum’s development team will need to implement an upgrade that addresses these two issues, failure to which its position as the DeFi market leader could be threatened. At its peak in February 2021, Ethereum chain accounted for 96 percent of the DeFi market. However, that has since declined to 54 percent as of this writing.

Ethereum price prediction

ETH price pivots at 3,119, and the buyers will be in control if action stays above that mark. Initial resistance is likely to come at 3,143, but extended bullishness could break above that level and test 3,165.

On the other hand, moving below 3,119 will shift the momentum to favor the sellers. In that case, the price is likely to find the first support at 3,100. However, a stronger downward momentum will break below that level and invalidate the upside narrative. That could also establish a second support at 3,086.