Ethereum (ETH) investors have been facing a tough time as the price has been trading below $2,000 for 25 consecutive days. While many other altcoins have seen significant rallies, Ethereum has remained stagnant, and four key metrics shed light on why this is the case. Let’s delve into these metrics to understand why ETH price is struggling to move higher.
The first metric that explains the lackluster performance of Ethereum is the declining number of active addresses. The active addresses have dropped from around 600K to 300K, indicating a significant decrease in investor interest. When fewer investors are interacting with the blockchain, capital flows are affected, leading to a stagnant price movement for ETH.
Another concerning metric is the decline in total fees burnt on the Ethereum network. Fees burnt play a crucial role in incentivizing validators and stakers, but a decrease in this metric points towards a pessimistic outlook for the price of Ethereum. The total fees burnt have dropped significantly, from 10K to less than 100, highlighting a decline in investor interaction with the blockchain.
Furthermore, the fees burnt per transaction have also seen a substantial decrease, dropping from nearly $80 to less than $0.1. This decrease signals a lack of interaction with the Ethereum blockchain, possibly due to competition from other networks like Solana. As a result, Ethereum’s value has remained stuck while the price of SOL has surged close to $300.
Additionally, the total supply of ETH has increased post-Merge activation, adding 600K ETH to the supply since April 2024. This increase in supply, coupled with a lack of investor interest, has put downward pressure on the price of Ethereum. The current macroeconomic conditions and the collapsing price of Bitcoin have further exacerbated the bearish outlook for ETH.
In conclusion, the outlook for Ethereum price prediction remains bearish until the aforementioned fundamentals improve. The lack of investor interest, decline in fees burnt, and increase in supply post-Merge activation are major factors contributing to the stagnant price of Ethereum. As investors closely monitor these metrics, it will be crucial to observe how Ethereum’s price responds to changing market conditions in the future.
