The explosive popularity of DeFi does not appear to have catalyzed any strong buying pressure for ETH price

ETH price has shown signs of technical weakness after only one night of denial from $ 250. At press time, ETH is hovering around $ 235, down nearly 4% in the past 24 hours. This level marked its high-time-frame resistance, and its inability to break above it seems to elucidate underlying weakness amongst its buyers.

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ETH/USD 4 hours chart | Source: Tradingview

One flaw of DeFi could hamper ETH long-term growth and sustainability

Ethereum has sparked signs of intense weakness today, with its latest denial at $ 250, suggesting its buyers are still fundamentally weak.

This is surprising for some investors, as ETH has been generating solid fundamentals recently. DeFi’s explosive popularity, coupled with the increasing stablecoin issuance, has spurred its use and utility while opening a significant number of new users into the Ethereum ecosystem.

the-explosive-popularity-of-defi-does-not-appear-to-have-catalyzed-any-strong-buying-pressure-for-eth-price

Most of this growth came about due to the recent launch of Compound, which has given rise to the “yield farming ‘trend in which users leverage Ethereum-based tokens to collect incentives that can, in some instances, be as large as 200% annually. Many investors believe that all this bodes well for Ethereum, as it has directed a significant amount of attention and new users to the cryptocurrency. Its price, however, has not yet recorded this.

Larry Sukernik, an Investment Associate at the Digital Currency Group (DCG), recently explained that a good portion of the Ethereum-based DeFi ecosystem is massively unusable despite it being created by very high IQ individuals. This could hamper the growth of the bourgeoning DeFi sector, potentially limiting its growth due to the knowledge required to navigate through many of the products successfully.

ETH price is still ready to keep pushing higher despite this latest failure

For weeks, ETH has been caught in a relatively wide trading range from $ 230 to $ 250. The latest denial occurred at the upper boundary of this trading range. Where it goes next may depend on its response to $ 238. An analyst talked about this level, explaining that breaking below this level would invalidate his bullish sentiment. t

While a break below $ 238 could be imminent, Ethereum’s bullish market structure will remain in effect as long as it holds above the $ 228 to $ 230 area.

Bitcoin is likely to play a significant role in Ethereum’s short-term price action. If the buyer of BTC fails to defend the support, it has as low as around $ 9,000, and this could catalyze a sharp sell-off across the market.

You can also check Ethereum Price here.

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