Experts from CryptoQuant have analyzed the reasons why the value of Ethereum continues to decrease. They noted that the primary factor behind this decline is reduced activity in the network.
This is reported by Business • Media
Reasons for the Decline in Ethereum’s Value
According to analysts, activity in the Ethereum network has significantly decreased since the beginning of the year. The number of active addresses is falling, and average transaction fees are reaching record low levels. This, in turn, has affected the inflationary pressure on the asset following the Dencun upgrade.
“Ethereum’s recent underperformance can be largely attributed to diminished network activity, as evidenced by declining active addresses and reduced transaction fees.”
Experts emphasized that the low level of coin burning after the Dencun upgrade, combined with persistently high inflation levels, continues to exert pressure on the asset’s value. In this regard, monitoring these metrics is considered important for understanding the future trajectory of the Ethereum market.
Prospects for Ethereum
Previously, co-founder of the L2 network Scroll, Ye Zhang, and founder of the projects Synthetix and Infinex, Kane Warwick, expressed concerns about the future of Ethereum in the context of L2 solutions. At the time of writing, the asset’s value was trading below $1800.
ETH/USDT Chart. Data: TradingView.