Key facts:
So far in Q3, the price of ETH has fallen by more than 30%.
September is usually a complicated month for the markets due to seasonal issues.
The price of ether (ETH), the native cryptocurrency of the Ethereum ecosystem, fell by more than 30% so far in the third quarter of 2024. This is the worst performance in the last 5 years between July, August and September.
As CriptoNoticias has already reported, September is a complicated month for financial markets, including bitcoin (BTC) and the rest of cryptocurrencies. In the northern hemisphere it is summer and economic activities are usually paralyzed by the holidays.
According to data collected by Coinglass explorer, ETH performance between July, August and so far in September fell by more than 30%. This exceeds the 13.64% recorded in the same period in 2023.
In 2019, meanwhile, the price of the native asset of the Ethereum network collapsed by 37.43%, as seen in the following table:
ETH Price fell below the $3,000 line since the financial crash triggered by “Black Monday” in early August. At that time, a perfect storm arose from a series of events such as: rumours of a possible economic recession in the United States, the end of the Japanese yen carry trade and geopolitical conflicts (tensions between Israel and Iran and developments in the war between Russia and Ukraine).
That event generated bearish pressure that brought the price of ETH to levels it has not yet managed to recover.
At the time of writing, ether is trading at $2,360, 50% below its all-time high of November 2021.
Another issue to keep in mind is that the launch of ether-based exchange-traded funds (ETFs) in the United States did not act as a catalyst for the asset price.
According to data from SosoValuefrom July 23 to September 16, these financial instruments only had 11 days of capital inflows. So far, they have accumulated outflows of more than 590 million dollars.
Ethereum network underperformance
As CriptoNoticias already reported, a report from CryptoQuant, a data explorer on-chain, He argues that one of the reasons why the price of ETH fell is because of the Dencun upgrade, which introduced temporary data storage on Ethereum’s second layer or L2, where transaction fees are cheaper.
What happens is that, If demand moves to the second layer, the buying pressure on ETH is reduced as fewer users need that asset to pay gas fees.
According to data from Token Terminal, Layer 1 network revenue fell 99% since March 2024:
With more than 10 days left until the end of the third quarter of the year, it remains to be seen whether a possible interest rate cut by the United States Federal Reserve (Fed) acts as a price catalyst for ETH.
A cut in the interest rate It may awaken investors’ appetite for assets considered “risky” like BTC, ether and cryptocurrencies. Because they are more exposed to market fluctuations, they generate greater profits.
If interest rates remain high, investors will seek refuge in traditional instruments such as Treasury bonds, which offer lower returns but are not exposed to market fluctuations.
