Ethereum Price Remains Grounded Despite Spot ETF Approval; ETH Could Trigger Massive Rally Soon

Ethereum price crashed 12% since the spot ETF approval on July 23 and formed a temporary low at $3,087. Since then, ETH has bounced 6% and currently trades under $3,300.

Ethereum (ETH) price performance has been underwhelming this year, especially when compared to other major cryptocurrencies. While Bitcoin (BTC), Solana (SOL), and Ripple (XRP) have generated impressive year-to-date returns, ETH is lagging behind significantly.

Despite the highly anticipated approval of spot exchange-traded funds (ETFs) for BTC, Ether prices have failed to respond enthusiastically. While BTC is up over 120% in 2023, largely due to the ETF approval, ETH has gained only 38%.

However, a closer examination reveals that ETH is exhibiting a unique price trend, which could be setting the stage for a massive rally later this year. Here's why.

Ethereum Price Key Highlights

* ETH price has underperformed major cryptocurrencies year-to-date.

* Three critical reasons could explain Ethereum's lackluster performance.

* Despite the bearish short-term outlook, one technicality offers hope.

Ethereum Price Underperforms Top Cryptos

While 2023 has been a fruitful year for cryptocurrencies, with most top digital assets generating triple-digit gains, ETH's performance seems underwhelming in comparison.

From January 1 to July 23, BTC surged 120%, Solana skyrocketed 320%, and XRP soared 200%. In contrast, ETH managed to eke out a gain of only 38%.

Interestingly, the approval of spot ETFs for BTC on July 23 had little to no impact on ETH price movement. Despite the bullish development, Ether prices crashed 12% in the following 24 hours, forming a temporary low at $3,087.

Since then, ETH has recovered slightly, bouncing 6% from the local bottom and trading below $3,300 at the time of writing.

But given the massive bullish case for ETH, especially with the launch of the Shanghai upgrade and the narrative surrounding Ether being sound money, many expected a more optimistic price reaction to the spot ETF approval. But why did ETH fail to respond?

3 Critical Reasons for Ethereum's Underperformance

There are three critical reasons for Ethereum's lackluster performance despite the BTC spot ETF approval.

First, Ether prices have been rallying throughout 2023. As mentioned earlier, ETH is up 38% year-to-date. In comparison, BTC has generated gains of over 120%.

With such a strong rally, ETH may be due for a consolidation phase or even a correction. This could explain the lackluster performance following the BTC ETF approval.

Second, the narrative surrounding Ether is shifting. Previously, the focus was on the cryptocurrency being sound money and a store of value. However, with the launch of the Shanghai upgrade, the narrative is now pivoting towards Ether being a yield-generating asset.

This shift in narrative may be impacting the price action of ETH, especially in the short term.

Third, the technical analysis of ETH on lower time frames reveals a bearish picture. Throughout 2023, ETH has formed a series of lower highs, indicating a short-term downtrend.

While the cryptocurrency has managed to avoid producing a lower low, the string of lower highs could be applying pressure on ETH price.

One sign of relief in the technical analysis of ETH is the absence of a lower low. Despite the bearish short-term outlook, ETH has held up well at crucial support levels.

If the cryptocurrency manages to flip the lower highs into lower lows, it could invalidate the bearish structure and potentially trigger a massive rally.

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