Despite recent bullish trading volume, the main Ethereum token is not likely to reach the $5,000 level this year. Ethereum has been a good performer for most of 2021, but there are fundamental reasons it may not light up the cryptocurrency market charts over the next few months.

The cryptocurrency is not likely to be able to surpass the $5,000 level, which it seemset seemed to have been able to reach a few weeks ago. Most of the time, Ethereum has an inverse relationship with Bitcoin. This time, it seems to have a stronger relationship with USD.

The only reason for ETH to reach the $5,000 level would be because of its inverse relationship with Bitcoin. This could change soon because of a huge price swing in Bitcoin, which has not happened so far this year unless you count the various pullback periods in 2021. Bitcoin is still struggling to be back above $40,000. If that happens, there will be a huge spike in Ethereum, which would force the ETH/USD pair to $5,500 or even $6,000.

When we look at the recent fundamental news updates developing around the Ethereum network, we see that there are certain factors that do not inspire confidence. When Ethereum founder Vitalik Buterin confessed that the new Proof-of-Stake functionality of the blockchain had been hampered by internal disagreement among members of the core development team, investors were quick to express their concerns.

If anything, a major reason the Ethereum blockchain is still the favorite means of releasing new token projects is the advent of decentralized finance technology . Thanks to the numerous side chain projects that DeFi developers have launched as layers to improve the ETH network, investors have not given up hope that the classic Ethereum token will appreciate in the near future.

With the proliferation of second-generation token technology, there is a better opportunity for investors who are looking to make the most out of their investments, not to mention the many blockchain-based projects launching in the near future. The cryptocurrency market has reached a critical stage in its evolution. There is an increasing need to diversify into different networks and projects.