The cost of Ethereum has decreased sharply, falling by more than 52% from its peak in December. Professionals emphasize a combination of technical indicators and on-chain data indicating that this downward trend may continue in the near future.
After reaching a high of $4,105 in December, ETH is currently trading at around $1,970. This significant decline makes it one of the worst performing major digital currencies.
Several factors are fueling concerns about the future of Ethereum. Recently, Standard Chartered analysts cut their ETH price target by 60%, from $10,000 to $4,000, citing increased competition from other networks affecting Ethereum’s revenue.
Layer-2 networks such as Coinbase’s Base, Arbitrum and Optimism attract users with their lower fees. For example, DeFi Llama data shows that decentralized exchanges (DEXs) on Ethereum processed more than $9.8 billion in transactions last week.
However, Arbitrum handled $2.87 billion and Base handled $2.8 billion. This volume would previously have been processed on the Ethereum main network.
Ethereum also faces strong competition from Layer-1 networks such as Solana (SOL) and BNB Chain. BNB Smart Chain’s DEX protocols processed more than $13 billion in DEX volume during the same period.
Ethereum’s high fees and slower speeds could also hinder its adoption in emerging technologies such as real-world asset tokenization. Developers may opt for more scalable and cheaper alternatives such as Mantra (OM) and BNB Chain. Toncoin (TON) Value Forecast for March 26th
Data also shows a decrease in active addresses on Ethereum in recent months. Santiment’s chart shows 461,000 active addresses on Wednesday, down from 717,000 earlier this year.
Another key indicator to watch is Ethereum’s realized cap HODL waves.
The cost of Ethereum has decreased to its nadir since the previous August, implying that even the most unwavering, durable owners are beginning to abandon ship.
A technical assessment of Ethereum’s cost exposes a substantial slump over the previous handful of months. Subsequent to creating a triple top configuration around $4,000, Ethereum’s cost commenced its plunge, breaching the neckline at $2,120.
Adding gasoline to the blaze, a death cross configuration has materialized, with the 50-day and 200-day moving averages converging. This sinister crossover generally steers to additional descending impetus. Furthermore, favored oscillators like the Relative Strength Index (RSI) and the Moving Average Convergence Divergence (MACD) are additionally on the wane.
The 365-day Mean Dollar Invested Age (MDIA), which monitors the duration each coin dwells in its address and the capital utilized to procure it, has attained a low unseen since September. Consequently, Ethereum’s cost is apt to prolong its descending route, with vendors eyeing the mental degree of $1,500, an astonishing 25% beneath its present worth.
In essence, Ethereum’s cost has struck all-time low since the prior August, intimating that even the most devoted backers are surrendering.”
