The top altcoin marked a 12% decrease as the price dropped to $331. At the same time, Bitcoin (BTC) price slid by 6.3% to find comfort near $10,300. The drop of Ethereum comes after a head and shoulders pattern grew apparent on the daily timeframe. The price slipped into a shart downtrend.
Some of the reasons are following Ether’s poor performance: a technical denial, a slight deflation of the Decentralized Finance (DeFi) bull run, and declining momentum.
A couple of analysts awaited Ether to correct
When Ether’s weekly candle started on Sept. 21, several technical analysts advised the possibility of a bearish retest.
After that, Ether’s price decreased from $372 to as low as $331 over dominant cryptocurrency exchanges.
Ultimately, the denial of a critical multi-year resistance area affected the selling weight on Ether to increase.
DeFi change put further pressure on Ether
In the last three months, the Ethereum system has grown as user activity skyrocketed. Several on-chain metrics showed a significant need for Ether.
The explosive growth of the DeFi sector pointed to strong demand on the Ethereum blockchain network to the position where it began to clog, and transaction fees erupted to new highs.
Data from Cryptofees.net explains that Ethereum is preparing around $3.77 million in daily fees to miners. In opposition, Bitcoin has been established around $369,000 in daily fees on ordinary in recent weeks.
Many of the positive sentiment around Ethereum turned around the rapid increase of the DeFi space. Therefore, when DeFi tokens plummeted, it possibly placed further selling requirements on Ether.
On average, DeFi tokens marked a 40% drop over the prior week. Even DeFi giants, like Yearn.finance, fell by 46% within the past ten days.