Ethereum’s price is anticipated to drop to $2,000 before potentially rising to $4,000, according to data from Polymarket, a well-known prediction platform.

The odds of Ethereum (ETH) falling to $2,000 before December 31 have been increasing since August 25, when they were at 54%. By August 27, these odds had risen to 60%, coinciding with the coin’s decline to $2,600 from a weekly high of $2,818.

Since March, Ethereum has been in a downward trend, peaking at $4,085. The current odds reflect that the coin needs to drop by 23% to hit $2,000. Conversely, it would require a 54% increase to reach $4,000.

Another Polymarket poll with $231,000 in assets indicates an 8% chance of Ether rising to $3,000 before September. Additionally, a poll involving $1.1 million shows that most traders do not expect Ethereum to hit a record high this year.

Ethereum has encountered numerous challenges in 2023. It faces significant competition in the stablecoin market, where Tron (TRX) processes billions of dollars in transactions daily. In the Decentralized Finance (DeFi) sector, Solana (SOL) outpaced Ethereum in July’s Decentralized Exchange (DEX) volume, with Solana handling $57 billion compared to Ethereum’s $54.5 billion. This month, however, Ethereum has taken the lead, managing $50 billion versus Solana’s $33 billion.

The biggest hurdle for Ethereum is the lack of traction for its exchange-traded funds (ETFs) among investors. Data reveals that these funds have seen a cumulative outflow of $477 million since their inception, with outflows occurring over the past eight consecutive days.

Ethereum’s technical indicators also suggest potential downside. The coin has formed a series of lower highs and lower lows and has created a “death cross,” where the 200-day and 50-day Exponential Moving Averages have intersected. Additionally, Ethereum has established a bearish flag chart pattern, indicating further declines might be on the horizon. Should this bearish trend continue, the next critical support level to monitor is this month’s low at $2,113. A break below this level could increase the likelihood of the coin falling to $2,000.

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