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Highlights
- Ethereum price remains stuck below $2,000 due to bearish fundamentals.
- Declining active addresses, fees burnt, and fees burnt per transaction indicate a lack of investor interest.
- The increase in ETH supply post-Merge has added to the downward pressure on the price.
Ethereum (ETH) investors continue to suffer as the price trades below $2,000 for 25 consecutive days. Although many altcoins have experienced massive rallies, Ethereum price has failed to move, and four charts accurately explain why this is the case.
Let’s explore why the ETH price remains stuck and unable to move higher with these four on-chain metrics from CryptoQuant.
- Declining Ethereum active addresses.
- A drop in total fees burnt.
- A decline in fees burnt per transaction.
- An uptick in the total supply of ETH post-Merge.
Ethereum Active Addresses Plummet
One of the reasons why Ethereum price has failed to perform is lack of interest from investors. The number of active addresses has seen a steep decline from around 600K addresses to 300K. When investors interacting with the blockchain dwindles, the capital flows are also affected, which explains the lackluster performance if ETH price.
Fees Burnt Declines
Adding credence to Ethereum’s bearish fundamentals is the decline in the fees burnt. Fees burnt incentivize validators or stakers, but a decline in this metric indicates a pessimistic outlook for the price.
With less investors interacting with the Ethereum blockchain it is logical to see the total fees burnt drop. This indicator has dropped from 10K to less than 100.
Additionally, the fees burnt per transaction has also dropped from nearly $80 to less than $0.1. All of these signals suggest that there is a decline in interaction with the blockchain particularly due to competition from Solana. Hence, ETH’s value remained stuck even as SOL price exploded close to $300.
Increase in Total Supply of ETH
The last nail in the coffin is the increase in supply of ETH post-Merge activation. The supply has increased from 120M to 120.6M, i.e., 600K ETH was added to the supply since April 2024.
A lack of investor interest coupled with an increase in supply already affects the price of Ethereum. To make matters worse, the price of Bitcoin is also collapsing, which does not help ETH’s case. Additionally, the worsening macroeconomic conditions have caused tension that has seeped from the US stock market into the crypto markets.
Hence, the outlook for Ethereum price prediction remains bearish and will continue to do so until the aforementioned fundamentals improve.
Frequently Asked Questions (FAQs)
1. Why is Ethereum price stuck below $2,000?
2. What is the impact of declining active addresses on Ethereum price?
3. How has the increase in ETH supply affected the price?
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