On-chain activity on the Ethereum blockchain has dropped noticeably in the past few months, driving fees to their lowest level since December 2022, Coinmetrics data shows. Interest and trading volumes for Ethereum-NFTs have also dropped to their lowest level since the end of last year, according to information from the Dune portal.
The rate of the leading altcoin has been fluctuating in the range of $1.5–1.7 thousand since August 18. At 15:30 Moscow time, ETH is trading at $1.62 thousand; according to CoinGecko, the market capitalization of the coin is $195.3 billion.
Experts told “RBC-Crypto” about the reasons for the decline in interest of crypto market participants in Ethereum and about the future prospects of the project.
“Not the best time”
Senior analyst at BestChange.ru Nikita Zuborev
“The Ethereum ecosystem continues to develop despite a period of decline in the market. The immediate decline in activity is most likely related to general market trends and cycles.
The market is now emerging from the “crypto winter”, and the redistribution of capital within the market traditionally begins (from altcoins to bitcoin) with a moderate influx of new funds. And for this reason, all projects experience a period of downtime.
The NFT market is currently at the beginning of its third wave of popularity. Therefore, we assume that in the coming months this segment will again begin to provoke the growth of the entire ecosystem.
We believe that this is still the most promising altcoin. The Ethereum ecosystem and its compatible blockchains are in many ways the flagship of the crypto market in the field of innovative technologies. Although excellent prospects for the community do not guarantee good prospects for investors.
Ethereum has been in a highly overbought zone for a long time. Against the backdrop of expectations for the transition to PoS in 2021–2022, which coincided with great investor interest in the crypto market (2021), the token increased significantly in price.
Now is not the best time for the leading altcoin; the correction of the coin itself has overlapped with the market correction, so before the situation stabilizes, most likely, we will have to wait not even for the end of the year (when the market is expected to revive), but for the second half of 2024. Until then, ETH is unlikely to outperform the top altcoin market average.”
CEO of RBK Trading LTD Vladimir Chirpicinikov
“In the current situation, it is worth looking at the market as a whole. Trading volumes on both centralized and decentralized exchanges have fallen to their lowest levels. This trend negatively affects the price of ETH.
In the short term, it is worth watching the key support level ($1.5 thousand) and resistance ($1.7 thousand). The price will probably move in this range in the near future.
In the long term, the price of ETH will begin to move upward towards the end of the year or in the first quarter of 2024. If it breaks through and fully consolidates above $2 thousand, the price of ETH can reach $2.6–2.8 thousand. The current sideways trend should be regarded as a good opportunity to accumulate an asset.
An event that could impact the price of Ethereum in the near future is the launch of a new test network, Holesky, which will replace Goerli and expand the testing capabilities of the ecosystem. Goerli, in turn, will be closed. A successful Holesky launch could provide a boost to the price. But this is not the only factor. The price of the coin will depend on many variables, including the movement of the entire market.”
BitRiver financial analyst Vladislav Antonov
“Intranet activity in Ethereum does not have a direct impact on the crypto market and the coin itself. The price of cryptocurrencies largely depends on supply and demand on exchanges, as well as on the sentiment of market participants. The leading altcoin has a close relationship with Bitcoin. Over the last 30 trading days, the correlation is 0.9. The movement of BTC/USD largely determines the direction of ETH/USD.
In recent days, the market has dropped significantly due to expectations of the sale of FTX crypto assets to pay clients. Then the market calmed down a bit. Volatility has decreased. The ETH/USDT pair recovered to $1,638. Market participants continue to focus on the prospects for approval of a Bitcoin ETF and the US Federal Reserve’s rate decision (September 20), as well as the dynamics of American stock indices.
The ETH/USDT pair has been trading in a wide range since mid-June 2022. The range is approximately $1 thousand. Its lower limit passes through $1460. If the cryptocurrency again begins to sharply fall in price against the American currency, then sellers will strive to lower the rate to $1,460.
Buyers have three levels on the horizon: $1665, $1750 and $1900. For a strong recovery, we need to overcome the $1,750 level.”
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