Cryptocurrencies continue to spend the weekend calmly. BTC found buyers at the $28,000 level. Although unable to break through the critical level of $28,300, the fact that the BTC price is hovering near this limit gives investors hope. However, the US inflation data to be released in a few days could bring losses to investors.

Why Didn’t Ethereum (ETH) Reach $2,000?

The price of ETH coin has risen by 35% in 2023, but despite multiple attempts, the psychological resistance level of $2,000 has not been permanently surpassed. In addition, a large number of altcoins have achieved even greater gains this year.

So, what exactly is causing the Ethereum price to be unable to break through this psychological resistance level despite multiple attempts?

ETH Price Bearish Fractal

The altcoin king’s movement this year is similar to the one seen in 2018-2019 around $425. In both cases, Ether struggled to close above the 0.236 Fib line on the Fibonacci retracement chart. In 2018-2019, the 0.236 Fib line was near $425, limiting Ethereum’s recovery attempts. In 2023, the same line is located in the $2,000 region.

A stronger dollar

The rise in DXY has affected the entire market and reduced the demand for ETH. In 2023, the weekly correlation coefficient between Ethereum and the US dollar index (DXY) continued to suppress prices.

According to CoinShares’ weekly report, net capital held by Ethereum-related investment funds has fallen by $114 million so far in 2023 as investors turn to safer havens.

Furthermore, the fact that the ETH ETF opened with just $2 million in daily trading volume on Monday suggests weak risk appetite.

Ethereum Network Activity

TVL has decreased from 18.41 million ETH to 12.79 million ETH so far in 2023. Network activity is decreasing, with ETH transaction fees reaching their lowest level of the year on October 5. A drop in transaction fees will also have a negative impact on the burn rate. While inflation has turned negative with the transition to PoS, it returned to positive within 30 days.

If network activity remains weak, the supply of ether will decrease and demand will have to increase. This means the price will also need to fight inflation.