Ether is poised for a challenging period in the near term, attributed to rising borrowing costs for wrapped Ether (wETH) and overbought technical indicators, according to analyst Markus Thielen from 10x Research. As Ethereum approaches a quieter summer, particularly in August, the shift in borrowing rates is significantly impacting the market. Currently trading at $3,623 with a 49% increase over the past month, Ether faces risks from declining profit opportunities in wETH borrowing—commonly used in decentralized finance (DeFi) platforms. Thielen notes that the use of Aave for borrowing has surged, with borrow rates climbing, making it unprofitable to borrow wETH. This could lead to a significant unwinding of borrowed assets, which may trigger wider repercussions across the Ethereum ecosystem. Despite these short-term challenges, Thielen remains optimistic about Ether’s long-term trajectory, anticipating improvement post-September, as historically Q4 performs better for Ether with an average return of 22.59%.

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