Many people wonder why the Ethereum price isn’t exploding yet. Even though bitcoin is going to record heights, the second-largest cryptocurrency is incapable of doing the same. Several on-chain metrics indicate this is not entirely unexpected either.
Traders Keep the Ethereum Price Down
Several factors need to be taken into account to understand the differences between Bitcoin and Ethereum. They have a very different circulating supply, target other users, and Bitcoin doesn’t support staking. That is all onlookers and newcomers need to understand for now.
As far as the Ethereum price is concerned, its all0tieme high is well above $1,440. That price hit when Bitcoin attempted tor each $20,000 three years ago. Today, the value per BTC sits near $23,000, yet Ethereum can’t get close to $700. A lot can happen in three years, and it won’t always be for the better either.
Ethereum’s current supply is over 113 million ETH, roughly six times as much as Bitcoin’s circulating supply. For that reason, one would think ETH can reach 1/6th of Bitcoin’s value, but that is not how the industry works. Despite Ethereum 2.0 staking now being active, there is still too much ETH liquidity.
This is evident when looking at the ETH exchange deposits as of late. When the recorded deposits can increase by 47.6% in a matter of days, it’s not hard to see why the Ethereum price isn’t going anywhere. More ETH hitting exchanges results in traders having an easier time to keep the price down.
ETH Exchange Deposits Soar
Making matters even worse is how the number of ETH exchange deposits hit a four-month high. A surprising turn of events, considering the recent launch of Ethereum 2.0 staking. Additionally, the Ethereum price isn’t doing too bad either. Even so, a lot of traders appear intent on selling now, for reasons unknown.
Keeping all of the above in mind, it seems unlikely there will be an Ethereum price increase shortly. Even hitting $700 will be difficult when the exchange deposits keep going up at this rate. The coming weeks will prove rather interesting for ETH as a speculative asset. For now, the price momentum doesn’t look too promising.
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