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Is the Ethereum price crash over as network metrics surge?

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Ethereum transactions have soared

Ethereum’s price crash continued its strong downward trend this week, reaching its lowest level since June 23 as the crypto market dive accelerated.

Summary

  • Ethereum price continued its strong downward trend this week.
  • The network’s transactions and active users have soared in the last 30 days.
  • Technical analysis suggests that ETH price has more downside to go in the near term.

Ethereum (ETH) token dropped to a low of $2,180, down by over 54% from its highest level since August last year. This retreat has brought its market value to over $274 billion.

Ethereum has crashed despite the ongoing network and ecosystem boom as companies like Fidelity, JPMorgan, and Janus Henderson embrace its network for their tokenized assets.

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Data compiled by Nansen shows that Ethereum’s network is firing on all cylinders. For example, the number of active addresses jumped by 45% in the last 30 days to over 15 million.

Another metric shows that the number of transactions jumped by 40% in the last 30 days to over 68 million, the highest level in years.

Ethereum transactions have soared
Ethereum transactions have soared | Source: Nansen

This growth has pushed its chain fees to over $15 million, up by 40% in the last 30 days. This growth occurred even as Ethereum transaction fees have continued to fall over the past few months.

More data show that Ethereum’s decentralized exchange network continued to rise in January, a trend that will likely continue in the coming weeks. Its DEX networks rose to over $52.8 billion in January from $49 billion in December last year. The most notable DEX networks are Uniswap, Curve Finance, Fluid, and Balancer.

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Most importantly, Ethereum has become a major player in the real-world asset tokenization industry, with its distributed asset value rising by 15% over the last 30 days to over $14.4 billion. Its stablecoin market capitalization rose to over $165 billion.

Ethereum price technical analysis 

Ethereum price
ETH price chart | Source: crypto.news 

The daily timeframe chart shows that the ETH price has been in a strong downward trend in the past few weeks. It crashed recently after forming a bearish flag pattern, which consists of a vertical line and an ascending channel. 

Ethereum price has dropped below the 61.8% Fibonacci Retracement level at $2,753. It moved below the 50-day moving average and Supertrend indicator.

ETH is forming a bearish pennant pattern, a common continuation pattern in technical analysis. It has also moved below the Supertrend indicator.

Therefore, the most likely Ethereum price prediction is bearish, with the next key support level being at $2,000. 

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Crypto World

Tim Scott Expects Proposal for Stalled Crypto Bill This Week

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Senate, Legislation, Bills

US Senator Tim Scott says he is expecting a possible compromise this week on a stablecoin yield payments provision that has stalled a crypto market structure bill in the Senate.

“I believe that this week we will have the first proposal in my hands to take a look at,” Scott, the chair of the Senate Banking Committee that is working to advance the bill, said on Tuesday at a crypto lobby event in Washington, D.C.

“If that actually happens before the end of this week, and I think that it will […] I think we’re going to be in much better shape,” he added.

The Senate has been looking to advance its version of a crypto market structure bill that outlines how regulators will approach crypto after the House passed similar legislation in July, called the CLARITY Act.

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Senate, Legislation, Bills
Tim Scott at The Digital Chamber’s DC Blockchain Summit on Tuesday. Source: YouTube

The Senate’s bill has stalled amid negotiations between banking and crypto lobbyists over a provision in the legislation that would ban third parties from offering stablecoin yield payments.

Banking groups assert that stablecoin yields paid by platforms such as crypto exchanges are a loophole in the GENIUS Act, which banned yield payments from stablecoin issuers, and could threaten the stability of the banking system through deposit flight.

As stablecoin yield payments are a popular way for exchanges to entice customers, crypto lobbyists have fought the claims and accused the banks of anti-competitive behavior.

Other issues in bill also making progress

Scott said the issue of stablecoin yield was only the “largest publicly celebrated challenge” of the bill, but other issues under negotiation included provisions around ethics, decentralized finance, and “who is carved in and who is carved out” of the rules.

“Those issues seem to pale in comparison to the rewards issue, but they’re still very important outstanding issues that we are nibbling away at as we work on the more popular issue of rewards and yield,” he added.

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Related: CLARITY Act risks handing crypto to centralized players: Gnosis exec

“We have made a lot of progress over the last probably 30 days or so,” Scott said. “We’re working on a lot of issues, but every single day it feels like the big momentum is finally on our side and we’re heading in the right direction.”

Procedural rules mean two committees are overseeing crypto market structure legislation in the Senate, as the bill concerns the Securities and Exchange Commission and the Commodity Futures Trading Commission.

Senate Banking, which oversees the SEC, indefinitely postponed a markup of the crypto bill in January, while the Senate Agriculture Committee, which oversees the CFTC, sent its markup of the bill to the Senate floor that same month.

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