Ethereum recently dipped below the critical and psychological support level of $3,000, raising alarm bells among ETH investors. This downturn occurs amid a continued decline in revenue across the Ethereum network. Ethereum’s current struggle is attributed to several factors, one being the outflows experienced by Spot Ethereum ETFs since their launch on July 23. Data from Farside Investors indicated an additional net outflow of $54.3 million on August 2.
Despite initial high expectations, these funds have not positively influenced ETH’s price, which has plummeted by over 10% since their introduction. According to Soso Value, the shared outflows from these funds have reached a cumulative net figure of $510.7 million since inception. Grayscale’s Ethereum Trust (ETHE) has notably contributed to these outflows, seeing $2.12 billion depart since its launch.
The market pressure from these outflows has played a significant role in ETH’s recent decline. Contributing further to the crash is the broader crypto market’s downtrend, spearheaded by Bitcoin. Ethereum’s fortunes often follow Bitcoin’s trajectory due to a strong price correlation, as highlighted by data from IntoTheBlock. When Bitcoin tumbles, Ethereum is typically not far behind.
Ethereum slipping below the $3,000 mark is causing concern among investors, particularly given the potential for further declines. However, historical data from the last three months suggests that ETH has consistently regained the $3,000 level after falling below it, indicating strong demand at this price point. Currently, Ethereum is priced at $2,991, according to TradingView charts.
Should Ethereum fail to stabilize around this range, it risks falling to a more critical support zone around $2,700. This level is significant as 11.11 million addresses purchased ETH at an average price of $2,647.
Concurrently, Ethereum’s revenue has plummeted to new lows, decreasing by 40.4% over the last 30 days and 44.8% on an annual basis, as per Token Terminal data. The network’s transaction fees have also been underwhelming, with users paying $92.97 million in fees in the past month—a decline of 32.8% monthly and 38.3% annually.
The reduction in revenue and fees appears closely tied to a drop in the network’s active daily users. Token Terminal reports a 9.8% decrease in Ethereum’s monthly active users, with weekly and daily active users falling by 20.1% and 15.3%, respectively.
Currently, Ethereum is trading at around $2,979, marking a decrease of over 5% in the last 24 hours, based on information from CoinMarketCap.
