Ether price struggles at $2,600 amid ongoing layer-1 competition

Ether (CRYPTO:ETH) has experienced a steady decline over the past seven months, dropping more than 36% from its yearly high of $4,111 in March 2024 to its current price of around $2,600. 

The ongoing competition among top layer-1 (L1) blockchain networks, such as Ethereum, Solana (CRYPTO:SOL), Avalanche (CRYPTO:AVAX), and Fantom (CRYPTO:FTM), may be contributing to this decline, according to crypto analyst Ignas. 

The “L1 wars” refer to the competition among blockchain networks to achieve a balance between security, scalability, and decentralisation without compromising any key aspects. 

In an Oct. 16 post, Ignas stated, “Ethereum isn’t the winner of the L1 wars,” and pointed out that the value being accumulated by Ethereum’s layer-2 (L2) networks remains unclear. 

This fragmentation could be creating opportunities for other L1 networks that are better suited for specific use cases.

One notable contender in this competition is Solana, which has gained attention for its monolithic scalability approach. 

According to Ignas, Solana’s model is attracting investors who might otherwise have supported Ethereum. 

He stated, “Solana is the biggest slap in the face of ETH Maxis,” referring to how Solana’s simpler approach has become more appealing as Ethereum’s L2 ecosystem continues to fragment.

Solana’s native token (SOL) has significantly outperformed Ether over the past year, surging by over 552%, while Ether has seen a more modest 57% rise. 

However, both Ether and Solana have been in a downtrend since March 2024, reflecting the challenges faced by both networks in a highly competitive market.

Technical indicators suggest that Ether may be heading for a correction. 

According to trader Justin Bennet, there is a possibility that Ether could correct to around $2,485 if it breaks below its current support levels.

At the time of writing, the Ethereum (ETH) price was $2,618.02.