- Ethereum has experienced a price decline, dropping to $2,530.88, alongside concerns over high transaction fees and network congestion that have led investors to opt for other cheaper tokens.
- Additionally, Ethereum’s total value locked (TVL) and decentralized exchange activity have fallen, contributing to its underperformance.
Ethereum and other digital tokens have experienced a substantial price decline. This follows a decline in Bitcoin after the Crypto King hit a three-month high of $70,000.
In the same vein, at the time of writing, Ethereum is swapping hands with $2,530.88, marking 0.99% and 3.54% in the last 24 hours and past week, respectively.
Additionally, the digital asset has recorded a 3.35% decline on the monthly chart. The recent price decline has caused concern among investors, especially as ETH’s chances of recovering above $2,800 seem to be diminishing.
This decline has led to analysts coming up with several factors that have led to the downward trend. As earlier reported, the primary cause has been high transaction fees which are driving users away from the Ethereum network and reducing demand for staking.
On-chain data is about to blow your mind. Data reveals that Ethereum’s congestion and high costs have been pushing activity to cheaper alternatives such as Solana.
Giving this a broader look, Ether’s value has decreased alongside a broader market slump, with the total cryptocurrency market capitalization falling by 5% over two days through October 23. Although the overall market is still up 1.9% in the past month, Ethereum’s 8% underperformance suggests that investor confidence in ETH is waning.
One key area of concern is Ethereum’s network congestion, which has resulted in average transaction fees of $4 over the past two weeks. This has made Ethereum less appealing for smaller use cases, particularly compared to other blockchains that offer lower-cost alternatives.
For example, Solana recorded $13.4 billion in volume over the past seven days, a 67% increase compared to Ethereum, which previously recorded similar volumes.
It is worth mentioning that Ethereum’s co-founder has frequently hit center stage announcing plans to increase scalability but to layer 2 solutions.
Decentralized exchange volumes on the Ethereum network have also dropped significantly, falling by 13% over the past week despite a broader market recovery. Notably, both Uniswap and Curve Finance saw activity decline by 18% during this period, while competing networks like Solana saw increases, Raydium’s volume surged by 42%, and Lifinity’s activity rose by 77%.
Ethereum’s total value locked, a key metric used to assess network health, has also taken a hit. The TVL currently sits at 18.2 million ETH, down 5% from one month ago. Investors have viewed this reduction in deposits negatively, especially as validators have started withdrawing staked Ether.
It is worth mentioning that according to Staking Rewards, the Ethereum network experienced a decrease of 191,000 ETH staked over the last 30 days, valued at approximately $492 million.
