Published on september 19, 2024, 12:22 am
Image source: Fox News
```json [ "TLDR: Ethereum's ETH price struggles to go above $2,450 due to a 17% decrease in DApp activity, leading to concerns about sustainability. High transaction costs and lower staking yields compared to competitors are areas of worry. Despite challenges, Ethereum remains active with stable user numbers, but investors should monitor closely given the decline in DApp volumes." ] ```
ETH Price Struggles as Network’s DApp Volumes Decline
The price of Ether (ETH) has been facing challenges as it struggles to climb above $2,450 for over two weeks. The recent 17% decrease in Ethereum decentralized application (DApp) activity has sparked concerns, especially impacting the layer-2 ecosystem. Traders are now questioning the sustainability of the current $2,250 support level.
Despite these struggles, Ethereum continues to lead in terms of activity and development within the cryptocurrency space, though competitors are making strides forward.
One significant concern for Ethereum is its high transaction costs, averaging around $1.70 currently. While scalability solutions have somewhat alleviated this issue, they have also added complexity and raised doubts about the network’s long-term security.
In terms of staking, Ether has not been as appealing compared to other investments; with a yield of 3.3%, it falls short of the 4.6% return from a US 6-month Treasury bill. Moreover, only 28.5% of ETH in circulation is currently staked, significantly less than other cryptocurrencies like Solana (SOL), Avalanche (AVAX), and Cardano (ADA).
Staking plays a crucial role in Ethereum’s total value locked (TVL), alongside other applications such as lending and trading that require ETH deposits. Thus, a smaller percentage of tokens involved in staking may not necessarily negatively impact Ether’s price.
While Ethereum has seen a notable decline in DApp volumes recently (-19%), it is important to compare this trend with competing blockchains to understand its full implications on fees and user activity levels.
Despite challenges faced by Ethereum DApps and exchanges like Uniswap seeing reduced volumes, there still remains stability in active addresses on the network – suggesting investors are not yet abandoning ship.
Though concerns exist regarding the increase in Ether deposits on exchanges – which could suggest impending selling pressure – there are no immediate red flags indicating a significant downturn below the $2,250 support level for Ether based on current network metrics.
Investors should stay vigilant but need not panic over the recent decline in DApp volumes. As Ethereum’s active users and TVL remain steady, there seems to be no immediate threat posed by this setback within the network.
Original article posted by Fox News
