A significant portion of cryptocurrency investors are investing in Ether due to their long-term outlook. However, even a historic step like PoS hasn’t been enough to revive the price. In the challenging environment of bear markets, ETH doesn’t seem to attract new investors anymore. There are several data points confirming this. So, what are the expectations for Ether?
Ethereum (ETH) Price
The price experienced a 7% decrease between October 6th and October 12th, dropping to a 7-month low of $1,520. The lack of interest in the recent ETH futures launch caused even the most optimistic investors to become pessimistic. The altcoin king, which saw only 0.2% of the volume during the launch of the Bitcoin ETF, was almost ignored.
When we delve into the details, it actually indicates an increase in disinterest across cryptocurrencies. Google trend data indicates that Ethereum searches have reached the lowest point in the past 3 years. The lowest levels since the bear market last month. So, is it normal to have such low search volume despite the influx of investors during the bull season?
The decrease in search volume to 2020 levels suggests that active investors may have dropped to 2020 levels or even lower. What else can explain the cumulative volume dropping to as low as $14 billion?
Ethereum (ETH) Analysis
The average 7-day transaction fees for Ethereum have dropped to the lowest level in the past 12 months, reaching $1.8. Is this good news? If you think that users of the network will pay lower fees, you are mistaken. ETH compensates for these low fees with its value loss.
Because the fee-burning mechanism before the PoS mechanism was reducing the supply by burning a portion of these transaction fees. ETH nodes continue to earn staking rewards. However, less ETH is being burned now because the fees have dropped to $1.8. Therefore, we can say that Ether is now inflationary. For example, negative inflation has reversed in the 30-day period. If low fees continue, the supply will increase significantly, and the price will erode.
The Ether futures premium reached its lowest point in five months on October 12th. The total value locked (TVL) of Ethereum decreased from 13.3 million ETH to 12.5 million ETH in the past two months, indicating a decrease in demand. The declining activity in most ecosystem DApps, including Uniswap and the largest NFT marketplace OpenSea, is worrisome.
So, what’s the conclusion? If on-chain data, Google trend data, and other indicators are effective in identifying the bottom, then the bottom for ETH may have already been reached. And we may be approaching a bigger drop for the bottom.
