Here’s What Might Hold Back Ethereum (ETH) From Hitting $5000 In Near Term

Here’s What Might Hold Back Ethereum (ETH) From Hitting $5000 In Near Term

The world’s second-largest cryptocurrency Ethereum (ETH) has been closely following Bitcoin’s footsteps as it touched an all-time high of $4,800 earlier this week on Monday, November 8. However, ETH currently looks under a bit of selling pressure lacking enough support from the bulls to push it past the $5000 milestone.

As of press time, ETH is trading 1.76% down at $4,707 with a market cap of $560 billion. But one major roadblock to Ethereum’s further rally could be its high gas fee. The average cost of the ETH gas fee has touched the highest in five months. As per on-chain data provider Santiment:

Ethereum is sitting at ~$4,780 at the time of this writing, and optimism that $5k is around the corner appears high. One of the few things holding $ETH back is the fact that the average network fee sits at $63.50, which was last this high on May 12th.

Ethereum Competitors Gaining Traction

Ethereum (ETH) has been one of the top-performing cryptocurrencies this year in 2021. The Ethereum blockchain has witnessed high DeFi and NFT activity this year.

However, the high transaction costs have been a deterrent for new DeFi players. Thus, they have been moving to other competing and alternative platforms like Solana (SOL), Polkadot (DOT), and many others.

As we have seen, Solana (SOL) witnessed a staggering bull run over the last few months making its way to the top-five crypto-list last week. Solana has emerged as a true Ethereum challenger with its high transaction throughput and low-cost transactions. Solana has also been the home for several DeFi protocols and has more than $15 billion in total-value locked (TVL).

Other upcoming players in the segment are Avalanche (AVAX) and Fantom (FTM). However, Ethereum still remains miles ahead when it comes to dominating the overall DeFi activity.

But all eyes are currently on Ethereum 2.0 development which will massively explode the network scalability while bringing down the transaction costs.