Ethereum Faces Network Shakeup: These Key Trends Point to Market Shifts
2024年10月1日 - 5:30AM
NEWSBTC
Ethereum, the second-largest cryptocurrency by market cap, has
recently shown signs of a shifting market sentiment and momentum,
according to an analysis by a CryptoQuant analyst named Percival.
The analyst disclosed that various market conditions and
technological developments have impacted Ethereum’s momentum and
have led to mixed views on its future growth trajectory. Related
Reading: Ethereum Price Trims Gains: Is the Rally Losing Steam?
Ethereum’s Market Sees Shift Percival, highlighted that Ethereum
has faced a decline in activity due to the rise of other
blockchains with greater accessibility, more advanced technology,
and faster update cycles. According to the analyst, “the positive
Momentum sentiment is far below expectations.” So far, the open
interest in Ethereum futures—a measure of capital flowing into
derivative contracts—reached $9.2 billion, with a notable inflow of
$2.12 billion in August 2024. This represents a 30% rise but pales
compared to the $6 billion inflow observed between April and May,
reflecting only half of that previous momentum. Another major
observation of the analysis was the “Coinbase Premium Gap,”
indicating the differential between the price of Ethereum on
Coinbase and other global exchanges. A slowdown in selling pressure
from US-based investors suggests a possible positive shift in
market sentiment. However, the market is still waiting for a
significant influx of capital to drive a strong rally for Ethereum.
The analyst pointed out that any future price recovery would depend
on substantial investment inflows, which have yet to materialize.
Furthermore, after the Federal Open Market Committee’s (FOMC)
announcements, Ethereum’s gas fees surged, hinting at a possible
shift of capital from traditional treasuries into decentralized
finance (DeFi). The analyst mentioned an instance: the DeFi lending
platform Aave, which operates on the ETH network, has seen a
moderate rise in fee collection, from $42 million in March to $43
million in August. Ethereum Network Lags Behind While Percival
noted that from an economic perspective, Ethereum needs to revert
to its max fee pass gas mean, aligning its growth with its
intrinsic value, the analyst also suggests that Ethereum currently
faces several internal gaps. Although the technology ecosystem
around Ethereum is expanding, the network seems to be lagging
behind the competition, according to Percival. The CryptoQuant
analyst reveals that this disconnect between Ethereum’s
capabilities and its technological rivals has led to a significant
shortfall in investment. Moreover, the limited inflow of small
capital and lack of consistent use suggest that even minor
investments are not being sustained over time. Related Reading:
Ethereum Taker Buy/Sell Ratio Is Rising Again — What It Means For
ETH Price The analyst’s take is further validated by the fact that
Ethereum’s network has faced increased competition from alternative
blockchains like Solana, Binance Smart Chain, and others that boast
higher transaction speeds and lower fees. This has, to some extent,
diverted attention and investment from Ethereum to these newer
ecosystems. Featured image created with DALL-E, Chart from
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