Ethereum Crashes: What’s Killing $ETH in 2025?

📉 Ethereum's Price Decline: Understanding the Factors 📉

Ethereum's price has experienced a significant downturn recently. Here's a breakdown of the contributing factors:

1. Increased Competition from Layer-2 Solutions

The rise of Layer-2 networks, such as Coinbase's Base, has diverted transaction activity away from Ethereum's mainnet. This shift reduces the fees collected by Ethereum, impacting its revenue and market capitalization.

2. Underperformance Compared to Rivals

Ethereum has lagged behind other major cryptocurrencies like Bitcoin, Solana, and Cardano. The growing popularity of these alternatives, due to their speed and cost-effectiveness, has drawn attention away from Ethereum.

3. ETF Launches Leading to Sell-Offs

The introduction of Ethereum ETFs, initially seen as a positive development, coincided with significant market sell-offs. This led to a sharp decline in Ethereum's price, exacerbated by large-scale liquidations.

4. Declining On-Chain Activity and Gas Fees

Ethereum's on-chain activity, measured by gas consumption, has not recovered to previous levels. The median gas fees have dropped significantly, indicating reduced usage and demand.

5. Delayed Technical Upgrades

The anticipated 'Pectra' upgrade, aimed at improving Ethereum's staking and transaction capabilities, has faced delays. This has contributed to uncertainty and skepticism among investors.

Despite these challenges, Ethereum remains a pivotal player in the crypto space. Investors and traders are closely monitoring its developments and market movements.

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