Given the uncertain long-term prospects, a large number of cryptocurrency investors are turning their attention to Ethereum. However, even with historic measures such as PoS, its prices still struggle to recover
Given the uncertain long-term prospects, a large number of cryptocurrency investors are turning their attention to Ethereum. However, even with historic measures such as PoS, its prices still struggle to recover. In the challenging bear market environment, it seems that there are no longer new investors attracted to Ethereum. Several pieces of data support this viewpoint. So, what are people's expectations for the future of Ethereum?
ETH Price
Regarding the price of Ethereum (ETH), from October 6th to October 12th, the price fell by 7% to a 7-month low of $1520. Investors seem to lack interest in the recently launched ETH futures, and even the most optimistic investors are becoming pessimistic. This' king of counterfeit coins' accounted for only 0.2% of the trading volume during the launch of Bitcoin ETFs, which was almost ignored.
However, after in-depth research, it was found that people's interest in cryptocurrencies has actually increased. According to Google Trends data, Ethereum's search volume has reached its lowest point in the past three years, below the lowest level since last month's bear market. So, despite a large influx of investors during the bull market, is it normal for search volume to be so low?
The decrease in search volume to the 2020 level indicates that active investors may have dropped to the 2020 level or even lower. What else can explain the drop in cumulative trading volume to a low of $14 billion
Ethereum (ETH) analysis
The average 7-day transaction cost of Ethereum (ETH) has dropped to its lowest level in the past 12 months, at $1.8 per transaction. However, this is not necessarily good news. Although internet users have paid lower fees, Ethereum compensates for these reduced costs through its value.
Before the PoS mechanism, supply was reduced by burning a portion of transaction costs. ETH nodes continue to earn pledge rewards. However, the number of ETHs destroyed has decreased as the cost has decreased to $1.8. Therefore, it can be said that Ethereum is currently experiencing inflation. For example, negative inflation can reverse within 30 days. If low costs continue, the supply will significantly increase and prices may decrease.
On October 12th, the Ethereum futures premium hit its lowest point in five months. In the past two months, the total locked in value (TVL) of Ethereum has decreased from 13.3 million ETHs to 12.5 million ETHs, indicating a decrease in demand. The decline in activity of most ecosystem DApps (including Uniswap and OpenSea, the largest NFT market) is a concern.
In summary, combining on chain data, Google trend data, and other indicators, it can be inferred that Ethereum may have reached the bottom. However, this may also mean the arrival of a larger decline.
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