Ethereum dominance has been on the up in the last couple of years. The cryptocurrency which is only about half as old as its predecessor bitcoin has managed to steal the largest market share from the pioneer cryptocurrency, making it the second most valuable digital asset in the market. However, maintaining such a large market share can prove to be daunting and Ethereum has continued to lose dominance.
Ethereum Dominance Drops 3%
Ethereum dominance had been climbing throughout the multiple bull rallies of 2021, touching as high as 22% at one point. This was a testament to the growth of the network, as well as the rapid adoption that was taking place. Both of which were being propelled forward by the advent of the decentralized finance (DeFi) and non-fungible tokens (NFTs) space.
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Going into the new year, Ethereum at first looked to be holding on to the growth from the previous year. However, two months into 2022 and it is apparent that the digital asset is taking a different route.
After peaking at 22.40% in December of 2021, Ethereum’s market dominance has been in a downtrend. So far, it has lost about 4% of its dominance in the two months that followed. Most recently, the cryptocurrency saw about 3% shaved off its dominance in a 24-hour period.
ETH dominance drops 3% | Source: Market Cap ETH Dominance on TradingView.com
Most of this decline was recorded in the late hours of Sunday going into the early hours of Monday. It saw Ethereum’s dominance drop from 18.40% where it had been trending during the weekend to 18.08% in the early hours of Monday. It is the second significant decline that has happened in the span of a week after ETH’s dominance had dropped from 18.49% to 18.14% on Friday, March 4th.
ETH Retests $2,500
Ethereum has fallen to the dreaded $2,500 level. This had been a long time coming given the low momentum recorded by the digital asset in the past week. The failure to secure any kind of significant support contributed greatly to this decline, pushing ETH down further to its next support level of $2,522. This support level, while not strong, was still important for ETH and a break below this will put it on a path towards $2,000.
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ETH has continued to fluctuate at this point, touching above and below this support level at intervals. Further proof that bulls have been unable to provide strong support at this point.
With the asset now firmly below its 50-day SMA, it has established itself in bear territory for the short term. A failure to recover above $2,600 would likely see the digital asset pushed farther down as bears continue to mount significant sell pressure on the cryptocurrency.
Featured image from Admiral Markets, chart from TradingView.com