ethereum price has remained in a tight range this month as its ecosystem faces substantial challenges and increasing competition.
ethereum (eth), the second-largest cryptocurrency, was trading at $3,310 on January 22, about 20% below its November highs. In comparison, bitcoin (btc), Solana (SOL), and Ripple (XRP) have recently retested their all-time highs.
ethereum has also continued to lose market share in key areas. For example, Jito has surpassed ethereum in fee income this year, generating $157 million compared to ethereum's $112 million.
ethereum's decentralized exchange volume has also fallen significantly below that of Solana. Solana-based protocols like Raydium and Orca handled $123 billion in volume over the last seven days, compared to ethereum's $26 billion. This increase was largely due to the popularity of the official Trump and Melania coins.
ethereum price has also struggled due to continued token sales by the ethereum Foundation and rising exchange balances. According to CoinGlass, these balances increased to 15.8 million eth, up from 15.3 million on January 1.
Still, there are positive catalysts that point to a possible ethereum price rally. ethereum spot ETFs have seen steady inflows, reflecting some demand from Wall Street investors. In the last five days, cumulative receipts increased to $2.74 billion.
Furthermore, the data shows that ethereum's leverage ratio has increased in recent months, reaching 0.6 compared to 0.24 in September 2023. Interestingly, the leverage ratio and ethereum price have diverged, which could indicate higher profits in the future.
<img loading="lazy" decoding="async" width="1929" height="1117" src="https://crypto.news/app/uploads/2025/01/Estimated-Leverage-Ratio.jpeg” alt=”eth Leverage Ratio”/>
Another promising factor is that ethereum futures open interest has remained elevated in recent weeks. On January 22, open interest stood at over $30.3 billion, a significant increase from the December low of $20 billion.
ethereum Price Technical Analysis
<img loading="lazy" decoding="async" width="3574" height="1982" src="https://crypto.news/app/uploads/2025/01/ethereum-price-chart.png” alt=”eth price chart”/>
The daily chart reveals that ethereum price encountered strong resistance at $4,000, which represents the upper limit of a cup and handle pattern. The cryptocurrency currently forms the driving section of this pattern.
The handle resembles a falling wedge, defined by two descending and converging trend lines. Falling wedge patterns are usually bullish and indicate potential profits. Furthermore, eth has remained above the 200-day exponential moving average.
As a result, ethereum is likely to see a strong bullish breakout, with the next target potentially at $4,000, marking a 21% rise from its current level.
