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Ethereum Facing Challenges as Bitcoin Remains Relatively Stable

ItÔÇÖs been an ugly month so far for Ether (ETH), the cryptocurrency that powers the Ethereum network, that remains the dominant blockchain used to power most sectors within web3, including DeFi, NFTs, GameFi, GambleFi, and SocialFi. The ETH price, which was last trading just under $1,550 after hitting new seven-month lows earlier this week at $1,520, is down a little over 7.5% for the month. This downward trend has led many to question whether it may be a good time to sell Ethereum and buy Bitcoin instead.

The Technicals Tell a Bearish Story

ETH/BTC has been stuck within a bearish falling wedge pattern for the best part of a year. That is, until about one week ago when the cross bearishly broke to the downside of this pattern. ETH/BTC has since found strong resistance at the downtrend that had formerly been offering support. Momentum remains firmly in the hands of the bears, and recent technical developments suggest a continuation of the recent bearish market bias, possibly leading to a test of the mid-2022 lows around 0.049 in the months ahead.

Ether Faces Demand Headwinds and Inflation

Falling spot trading volumes across major cryptocurrency exchanges indicate an overall subdued demand for cryptocurrencies. However, Ether seems to be facing an acute demand problem. Despite the launch of several Ether futures Exchange Traded Funds (ETFs) in the US recently, trading volumes have been weak, suggesting that institutions remain on the sidelines for now. On-chain metrics such as active users, number of transfers, total transfer volume, and new addresses have also been stagnating, while gas fees are low and the Ether supply is turning inflationary. In addition, Ether staking yields are currently below 4%, making long-term US government bonds with a yield closer to 5% a more attractive option for investors seeking lower-risk assets.

Bitcoin Looks Like the Better Near-term Bet

In addition to facing technical and demand headwinds, Ether also faces greater regulatory risks in the US compared to Bitcoin. The SEC has explicitly stated that Bitcoin is not considered a security, while there is uncertainty surrounding the regulatory outlook for ETH. SEC Chairman Gary Gensler has previously expressed his belief that Ether is a security, which adds further ambiguity. This regulatory uncertainty may continue until there is more clarity, either through Congress passing comprehensive crypto legislation or through decisive defeats for the SEC in its lawsuits against US crypto firms. In contrast, Bitcoin is seen as a safe haven within the crypto space, with bullish narratives expected to grow in 2024, thanks to potential greenlighting of spot Bitcoin ETFs by the SEC and the upcoming halving in April.

How AI legalese decoder Can Help

Amidst the complex legal language and regulatory uncertainties surrounding cryptocurrencies, the AI legalese decoder can be a valuable tool. It uses artificial intelligence and natural language processing to decipher legal documents, regulations, and opinions related to cryptocurrencies and blockchain technology. This tool can help investors and stakeholders navigate the legal landscape, understand potential risks and opportunities, and make informed decisions. By providing clear and concise interpretations of legal terms and regulations, the AI legalese decoder can enhance understanding, reduce ambiguity, and mitigate legal and regulatory risks associated with cryptocurrencies like Ether and Bitcoin.

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