© Reuters Ethereum (ETH) needs these 3 crucial factors to align for growth: Details
U.Today – Despite Ethereum's position as a leader in the altcoin sector, its growth has been slowed by a bearish trend that has maintained a strong grip on the market in recent weeks. A closer look at the ETH chart reveals that the expected volatility spike that could catalyze a bullish reversal has yet to materialize.
Layer 2 network adoption and ecosystem expansion
Firstly, the rise of layer 2 solutions like Arbitrum and Optimism could be a catalyst for Ethereum's growth. These networks aim to enhance the Ethereum ecosystem by providing much-needed scalability and reduced fees, potentially driving renewed interest and greater adoption of the Ethereum network.
Chart by TradingView
Network scalability and efficiency.
Second, Ethereum's persistent scalability issues must be addressed. Despite the implementation of EIP-1559, which was expected to make transaction fees more predictable, the network still struggles under high demand, resulting in exorbitant fees and reduced network functionality. Solving these scalability issues is crucial, as a more efficient and cost-effective network is vital for Ethereum to retain its value and utility.
Introduction of the Ethereum ETF
Lastly, the establishment of an Ethereum ETF would be a strong bullish signal, reflecting the impact of the ETF. An Ethereum ETF would pave the way for institutional investment, providing a regulated and accessible means for traditional investors to gain exposure to ETH. This could secure Ethereum's future as a mainstream financial asset and provide a stable foundation for long-term growth.
Looking at the Ethereum chart, we identify a local resistance level at around $2,433.5, a price that has acted as a hurdle in the past few trading sessions. For a bullish case to solidify, Ethereum needs to overcome this resistance with conviction. If this were to occur, it could signal a change in investor sentiment and open the way to higher price levels.
This article was originally published on U.Today.
