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| Will the price of Ethereum drop further? Expert Analysis and Prognoses for the Future |
Ethereum (ETH), despite currently being well below its all-time high of $4,891 in November 2021 and having experienced a substantial drop of 67.44%, is displaying signs of recovery with a 37% increase since the start of the year.
Based on data from 21milyon.com, the cryptocurrency witnessed a 2.67% decline last week and is presently valued at $1,592. Moreover, the trading volume has decreased by 41.83% within the past 24 hours, reaching $2.93 billion.
Will Ethereum Price Continue to Decline?
Although concerns have arisen regarding the drop, experts attribute Ethereum's relatively modest performance to the implementation of Proof-of-Stake (PoS) through The Merge. This transition results in a noteworthy 99% reduction in energy consumption along with significant improvements. However, it also leads to an increase in liquid stake transactions. Approximately 10% of the total Ethereum supply, equivalent to about 12 million ETH, is now locked in platforms like Lido Finance.
This shift has also raised concerns regarding network centralization, which places downward pressure on Ethereum's performance. In a report released on Thursday, JPMorgan analysts expressed disappointment with the rise in network activity despite energy efficiency and deflationary mechanisms.
The bank observed a 12% decrease in daily transactions, a roughly 20% decrease in daily active addresses, and an almost 8% decrease in the total value locked (TVL) in decentralized finance (DeFi) on the blockchain.
On Saturday, prominent crypto analyst Ali Martinez highlighted the absence of significant buying activity among Ethereum whales. These influential investors, known for their extensive wallets, possess the potential to substantially impact the market through substantial buying or selling activities.
The Future of Ethereum
Notwithstanding the challenges, data shared by leading analytics firm Santiment reveals a significant decrease in Ethereum gas fees. Santiment reports that Ethereum's gas fees have reached their lowest levels since 2023, currently standing at $1.15 per transaction.
The statement from Santiment asserts:
"Historically, we have witnessed increased usage as ETH becomes more affordable. Increased utility can then lead to improvements in market value levels."
Having briefly traded above $1,650, Ethereum encountered resistance at $1,670 and subsequently entered a downtrend. To transform short-term optimistic expectations into reality, Ethereum must maintain support above the $1,615 level and continue to ascend towards the $1,850 to $1,900 range. Conversely, an important support level to monitor lies at $1,500.
