ETH's price underperforms despite bullish development

ETH's price continues to drop despite the amount of ETH staked reaching an all-time high.

Ethereum (ETH) has recently reached a remarkable on-chain milestone, with the total value locked (TVL) in the ETH 2.0 contract hitting an all-time high. This achievement signifies a strong show of confidence from long-term investors in the project. Despite this positive development, however, the altcoin's price has been undergoing consolidation in the medium term and showing underperformance in the short term.

In the past 24 hours, the price of ETH experienced a drop, but it still managed to outperform its biggest competitors, Binance Coin (BNB), Cardano (ADA), and Solana (SOL). However, amidst the price fluctuations, Ethereum's network recently reached a new record in security with an astounding $52.3 billion worth of assets locked, indicating a significant vote of confidence from long-term stakeholders.

Daily Performance

The price of ETH stood at $1,852.14 at press time according to CoinMarketCap. This was after the altcoin printed a 1.21% loss over the past 24 hours. Furthermore, this negative daily performance pushed ETH’s negative weekly performance further into the red to -3.13%.

ETH had reached a 24-hour high of $1,904.48 in the past day of trading, but had since retraced to trade at its current level. Meanwhile, the altcoin’s daily low sat at approximately $1,837.98. Despite the 24-hour loss, ETH was able to strengthen against the market leader Bitcoin (BTC) by 0.94% over the past day of trading. This meant that 1 ETH was worth 0.06331 BTC.

Investor Confidence Grows Even Though Activity Simmers Down

This recent drop in ETH’s price does not tell the full story, however, as the Ethereum network achieved a significant milestone in the past 48 hours. On-chain analysis shows that there is a record-breaking value of $52 billion now providing security to the ETH network.

More specifically, the on-chain tracking platform IntoTheBlock revealed that the Ethereum network is presently secured by an astounding $52.3 billion, making it the highest value ever recorded. This was after the TVL in the ETH 2.0 Deposit Contract had reached an all-time high, with a staggering 26,232,679 ETH deposited.

The high amount of ETH locked in staking serves as an indication of long-term investor confidence in the project. By staking their ETH, investors are unable to withdraw their staked tokens until the staking period lapses. This exposes the investors to potential losses as they are not able to lower their exposure to the cryptocurrency in the event of unfavorable price movements. The fact that investors opt to lock their holdings in staking despite this potential risk suggests a high level of confidence in the project and its team.

Despite this bullish development, the network has witnessed a decline in its overall activity, as reported by the cryptocurrency intelligence firm, Santiment. This reduction in active addresses and a decrease in holdings by significant wallet investors are two factors that may exert a negative impact on the price of Ethereum in the next couple of weeks.

ETH’s Price Continues to Trade in a Medium-Term Consolidation Phase

Weekly chart for ETH/USDT (Source: TradingView)

ETH dropped below the significant support at $2,375 on the 9th of May 2022. In the weeks that followed, the cryptocurrency’s price continued its decline to the crucial support at $895. It then bounced off of this level to attempt a retest of the 20-week Exponential Moving Average (EMA) line on the 8th of August last year. This attempt resulted in the leading altcoin’s price getting rejected by the technical indicator.

Nevertheless, bulls attempted another 3 attempts at breaking through the short-term momentum indicator in the weeks that followed and were finally able to flip the level into support in the second week of this year. There was a temporary drop back below the EMA line on the 6th of March, but buyers were able to close the weekly candle back above the technical indicator.

Since then, ETH has been in a consolidation phase between the aforementioned $895.00 support and the $2,375.00 mark. However, the leading altcoin’s price was able to break above the 20, 50 and 100 EMA lines on the weekly chart during this period.

Daily chart for ETH/USDT (Source: TradingView)

From a short-term perspective, the past few days have seen ETH’s price drop below the 20-day and 50-day EMA lines. In addition, it also retested the crucial support at $1,850.00 earlier in today’s trading session. Bulls were, however, able to elevate the altcoin’s price to back above the technical indicator at press time. Nonetheless, ETH’s short-term bullish trend seems to be reaching an end as the 20-day EMA was bearishly closing in on the 50-day EMA line.

ETH Outperforms Its Biggest Competitors

ETH’s three biggest competitors, BNB, ADA and SOL saw their prices drop over the past 24 hours as well. At press time, BNB was changing hands at $238.63. Meanwhile, ADA was trading at $0.3069, while SOL’s price stood at $23.60. This was after the altcoins printed 24-hour losses of 1.58%, 2.37% and 4.05% respectively.

In addition to this, the past 24 hours saw ETH outperform BNB by 0.42%. ADA experienced the same fate and was down 1.18% against ETH. Lastly, SOL was also outperformed by the largest altcoin by market cap and was down 2.85% against ETH. Consequently, 1 BNB was valued at 0.1289 ETH, while 1 ADA token was estimated to be worth 0.0001658 ETH. SOL, on the other hand, was worth approximately 0.01274 ETH.