Key Points
- Ethereum’s price falls below the critical $3,000 level, raising concerns for its supporters.
- Ethereum’s revenue and fees have also seen a significant decline, attributed to a decrease in the network’s active daily users.
Ethereum (ETH) has seen a recent dip below the crucial $3,000 mark, causing worry for those bullish on the cryptocurrency. This comes in the midst of a continued decrease in revenue generated on the Ethereum network.
Ethereum’s Price Falls
The drop in Ethereum’s price below $3,000 is believed to be due to several factors. One of these is the outflows experienced by Spot Ethereum ETFs since they started trading on July 23. Data from Farside Investors shows that these funds saw a net outflow of $54.3 million on August 2.
These funds have not had the expected positive impact on Ethereum’s price, with the cryptocurrency’s value dropping over 10% since the funds began trading. Data from Soso Value indicates that these funds have suffered cumulative net outflows of $510.7 million since their launch. Grayscale’s Ethereum Trust (ETHE) has been individually responsible for these outflows, with $2.12 billion flowing out of the fund since its inception.
This has resulted in substantial selling pressure on Ethereum, leading to its recent downtrend. The price of Ethereum has also fallen below $3,000 due to the broader crypto market’s downtrend led by Bitcoin. Ethereum was expected to see a significant decline following Bitcoin’s drop as data from market intelligence platform IntoTheBlock shows that both assets currently have a strong price correlation.
The drop in Ethereum’s price below $3,000 is undoubtedly concerning for investors. However, Ethereum has quickly reclaimed the $3,000 level these past three months whenever it drops below this crucial support zone. This trend might continue, especially with data from IntoTheBlock indicating a strong demand for Ethereum at this price level.
Ethereum’s Revenue Declines
Data from Token Terminal reveals that Ethereum’s revenue has hit new lows, down by 40.4% in the last 30 days and 44.8% annually. The fees earned on the network have not been impressive either. Over the last 30 days, Ethereum users have paid $92.97 million in fees, a 32.8% decline and 38.3% drop at an annual rate.
The decline in Ethereum’s revenue and fees can be attributed to the decrease in the network’s active daily users. Additional data from Token Terminal shows a 9.8% drop in Ethereum’s monthly active users. The weekly and daily active users have also seen drops of 20.1% and 15.3% respectively.
At the time of writing, Ethereum is trading at around $2,979, down over 5% in the last 24 hours, according to data from CoinMarketCap.
