30s Summary

Ether (ETH) lost all its gained value in the period between October 20 and 23, marking a 9.6% drop, largely due to declining transaction volumes on Ethereum and high transaction fees. While smaller users are getting pushed away due to this high cost, other platforms like Solana are attracting more activity. Moreover, decrease in Ether’s staking and slower price progress, along with investor concern over the upcoming Prague-Electra upgrade, have contributed to Ethereum’s underperformance. In contrast, chains like Solana and BNB are witnessing better deposit activity and growth in overall value.

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The price of Ether (ETH) fell by 9.6% between Oct. 20 and Oct. 23, losing all the value it had gained in the previous 10 days. As it hovers around $2,500, ETH’s performance for the last month stands at a 6% loss. It seems less likely that ETH will be able to bounce back to a support level of $2,800 as high transaction fees are driving people away from the Ethereum network.

One reason that we saw a drop in Ether’s value recently is linked to a 5% decrease in the total value of all cryptocurrencies. While the overall market is still up by 1.9% for the last month, ETH’s performance hasn’t kept pace, trailing the market by 8%.

One significant issue for Ethereum is the average transaction fee, which stood at $4 over the past two weeks. While this may seem like a sign of a vibrant network, it makes alternatives with lower-cost services look more attractive. Big investors aren’t as affected by the fees, but they can create barriers for smaller users. For example, DefiLlama’s data showed a significantly higher volume of transactions on the Solana network compared to Ethereum’s in the past seven days.

On the Ethereum network, lower activity was recorded across decentralized exchange (DEX) volumes, with both Uniswap and Curve Finance seeing an 18% decrease. In contrast, engagement on Solana’s Raydium increased by 42%, while Lifinity’s activity grew by 77%.

In terms of overall value tied up in the network (TVL), Ethereum’s performance has been disappointing. There’s less demand for ETH when there are fewer deposits, and that’s indeed the scenario we’re seeing, especially as Ether is being withdrawn from staking. Over 30 days, 191,000 fewer ETH stakes were recorded, which at today’s prices are worth around $492 million.

Comparatively, Ethereum is trailing behind other networks. Solana’s TVL rose by 12% in its own currency’s terms, while deposits on the BNB Chain remained steady over a month. Investors are unsatisfied with Ether’s price progress and are also concerned about the upcoming Prague-Electra upgrade and whether it’ll manage to fix network congestion problems.

Source: Cointelegraph