Ethereum is inching closer to the milestone of $3,000 as the article is being drafted. It is poised to soon set a new support level of $3,200, probably by the end of this year. However, one crypto investor pointed out that Ether is currently overvalued. Fred Krueger even said that the supporters of ETH have detached from reality, especially since the token surpassed the $3,000 value for a few moments.
Fred stated three points to support their arguments. One, they said that the on-chain activity was declining in a general sense. Second, there is fierce competition from players like Avalanche and Solana, for they provide a more economical alternative. Third, regulatory uncertainty prevails over the categorization of ETH, along with the approval of Spot Ether ETF by the US Securities & Exchange Commission.
Krueger believes that alternate players in the segment offer more scalability and economical transactions. They added that Ethereum could do the same by controlling its fees and enhancing the execution of transactions. DAUs on the network, that is, daily active users, have come down to 66,000 as of February 2024. This is a sharp drop from the 120,000 recorded in 2021. That was also the time when prices of altcoin and ETH peaked.
What surprises Fred is the fact that the market cap is rising even though the token is overvalued. They have even compared Ethereum to meme coins, stating that it has become a bloated meme coin like Shiba Inu.
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According to the crypto investor, investors are beginning to recognize that Avalanche, Solana, and Near Protocol, among other players, are offering better value in DeFi and gaming, plus others.
The lack of regulatory uncertainty pertains to its upcoming Spot Ether ETF product. The community is anticipating that the Commission will approve all major applications and give the green light to the product just like it did for Bitcoin on January 10, 2024. One factor that could act as a hindrance is its categorization. Fred said that the Commission approved Bitcoin ETF because it identified the token as a commodity. The same has not been done for Ethereum to date.
Nevertheless, the Ether community is optimistic about the future of their holdings. Ethereum price prediction estimates that ETH will eventually surpass the milestone of $5,000 by the end of this year. An alternate valuation could be ~$4,700, depending on how the market reacts in the remaining 9–10 months of 2024.
The short-term target is to achieve the milestone of $3,000 and sustain it for a couple of weeks so as to set a new resistance level. Ethereum supporters are also optimistic about adoption throughout 2024.
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ETH will probably dance to new tunes set by BTC after Bitcoin Halving. BTC is currently down by 0.03% and is listed at $51,716.
