Ethereum has recently experienced a decline in its value, raising concerns among investors and followers of the cryptocurrency market. In this article, we will discuss the main reasons that led to this decline.
1️⃣ Global economic pressures 🌍💰
Economic tensions between major countries, such as the U.S. imposing tariffs on China, Mexico, and Canada, have led to uncertainty in financial markets. This situation has caused investors to turn to safe assets, negatively affecting digital currencies, including Ethereum.
2️⃣ Increase in supply and selling pressure 📊📉
During the last month, the supply of Ethereum increased by approximately 66,350 coins, equivalent to over 138 million dollars at current market prices. This increase in supply has led to significant selling pressure, as many investors began to sell their holdings, contributing to the price decline.
3️⃣ Massive liquidation and "whale" activity 🐋⚠️
Markets using leverage have seen significant liquidations of long positions in the last 24 hours, totaling about 861 million dollars, with 168 million dollars for Ethereum. When "whales" (large investors) sell massive amounts, it leads to a rapid price drop.
4️⃣ Decrease in interest from institutional investors 🏛️❌
Capital flows out of Ethereum's ETFs exceeded 513 million dollars in recent weeks, reflecting a decline in interest from large investors in this currency, which has negatively impacted overall market confidence.
5️⃣ Strong competition from other blockchain networks ⚔️🆚
Some other networks, such as Tron (TRX) and Solana, have started to compete strongly with Ethereum, excelling in areas such as transaction speed and lower fee costs. Additionally, layer two networks like Arbitrum and Base have begun to attract the interest of developers and investors.
6️⃣ Decline in Ethereum network profitability 💸📉
Ethereum was one of the most profitable networks, but it has now fallen behind other projects like Solana, Uniswap, and Tether. Its annual profits have only reached 210 million dollars so far, a figure lower compared to its competitors.
7️⃣ Decrease in network activity 📉📉
The number of daily active addresses on the Ethereum network has dropped from over 700,000 to just 293,000, reflecting a decline in interaction and daily usage of the network. This drop in activity weakens the currency's value and affects investor confidence in it.
Summary 🧐🔍
Several economic, technical, and market factors have converged to cause the decline in the value of Ethereum. Strong competition, declining investor confidence, and increased supply in the market are all reasons that contributed to this drop. However, the cryptocurrency market is highly volatile, and Ethereum may experience a future recovery if confidence returns and its usage increases in decentralized applications and new projects.
Do you think Ethereum will recover soon? 🤔💭 Share your opinion in the comments! 🚀🔥
