Ethereum Faces Challenges Below Key Support Levels 📉
Ethereum, the second-largest cryptocurrency, is currently struggling below the critical and psychological level of $3,000, causing concern among investors and enthusiasts. The recent downtrend in Ethereum’s price can be attributed to various factors affecting the network’s performance and overall market sentiment. Let’s delve into the key issues impacting Ethereum’s price movement and revenue generation:
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Outflows from Spot Ethereum ETFs:
- Spot Ethereum ETFs have been experiencing significant outflows since their inception in late July, with a net outflow of $54.3 million recorded on August 2.
- These outflows have not had the desired positive impact on ETH’s price, with Ethereum plunging over 10% since the ETFs began trading.
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Selling Pressure from Grayscale’s Ethereum Trust:
- Grayscale’s Ethereum Trust (ETHE) has been a major contributor to the outflows, with $2.12 billion flowing out of the fund since its launch.
- These significant outflows have added selling pressure on ETH, further contributing to its recent downtrend below the $3,000 mark.
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Correlation with Bitcoin’s Price Movement:
- Ethereum’s price decline has also been influenced by the broader crypto market’s bearish trend, led by Bitcoin.
- Market data indicates a strong price correlation between Bitcoin and Ethereum, leading to synchronized price movements between the two assets.
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Revenue Decline and Fee Reductions:
- Ethereum’s revenue has plummeted to new lows, experiencing a 40.4% decline in the last 30 days and a 44.8% annual decrease.
- Fees earned on the Ethereum network have also declined by 32.8% in the last month, indicating reduced user activity and network usage.
- Drop in Active Users and Addresses:
- Data shows a significant drop in Ethereum’s daily, weekly, and monthly active users and addresses, signaling weakening network engagement.
- These declines in user activity have directly impacted Ethereum’s revenue generation and overall network performance.
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