Ethereum’s price has slipped below the $1,700 mark after initial gains failed to hold, signaling a shift in sentiment toward competing blockchain platforms. On Tuesday, April 22, the price retraced after briefly reaching a monthly high of $1,725. This dip coincides with a significant portfolio shift by Galaxy Digital, which exchanged $106 million worth of Ethereum (ETH) for Solana (SOL) over the past two weeks, according to blockchain data platform Lookonchain.
Galaxy Digital Moves Away from Ethereum
Galaxy Digital’s large-scale swap, conducted via Binance, highlights a broader trend among institutional investors. The move away from Ethereum reflects mounting concerns over its scalability and high gas fees, which have become more pronounced as alternative Layer 1 blockchains like Solana gain traction. Solana’s faster transaction speeds and growing ecosystem are key factors that are drawing institutional interest.
This shift is further emphasized by a decline in Ethereum’s market dominance, which has dropped below 7%, marking its lowest level in years. Despite Ethereum’s continued leadership in developer activity and Total Value Locked (TVL) on its protocol, its dominance is slipping as competitors offer more scalable solutions.
Ethereum Faces Increasing Scalability Challenges
The growing sentiment against Ethereum is attributed to ongoing scalability issues, which are compounded by high gas fees and slow Layer 2 adoption. These challenges are dampening its competitive edge, with Solana and other blockchain projects increasingly capturing institutional interest. Ethereum’s dominance has fallen 63% since June 2024, as Ethereum’s decentralized exchange volumes also continue to decline.
The shift in Galaxy Digital’s portfolio, alongside these broader market trends, signals a growing institutional preference for platforms with greater scalability and lower transaction costs.
Price Outlook: Resistance Near $1,725 Could Trigger Further Decline
Ethereum’s price action is showing signs of caution, with momentum indicators suggesting a possible pullback. After reaching a high of $1,725, Ethereum closed the day at $1,701. The price now faces resistance near the upper Bollinger Band at $1,725, indicating potential overextension. Analysts predict that if selling pressure increases, Ethereum could retrace towards the $1,600 level, or even lower to $1,542.
The MACD indicator shows short-term bullish momentum, but the overall trend remains weak, with the MACD line still below zero. If Ethereum fails to close above $1,725, a rejection at this resistance level could lead to further declines. However, if the price manages to sustain above this level, there is potential for a breakout towards $1,800.
As institutional players like Galaxy Digital continue to adjust their portfolios, Ethereum’s path forward remains uncertain, with its dominance in the crypto space increasingly being challenged by faster, more scalable alternatives.
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