Here is why Ethereum (ETH) is still bleeding, according to Cryptoquant

The past few months have been difficult for the ethereum ecological system, as ETHER (ETH) has decreased to levels that have not been seen since 2020. ETH suffers from twice the performance of Bitcoin (BTC) and some of the two main cabins. Worse, the bleeding does not seem to stop soon.

According to a report Through the Cryptoquant market analysis platform, the decreasing network activity is one of the main reasons behind the value ETHEREUM value. This continuous continuous activity contributes to the high inflation rate of the ETH, which causes the cryptocurrency to lose its value over time.

Network activity decreased

The number of active headlines on ETHEREUM has decreased steadily since the beginning of the year. In addition, the average fee for each transaction and a mass for each block decreased to record its lowest levels. As a result of low fees and active addresses, the ETH burning rate has decreased to its lowest level since the merger.

I remember that ETHEREUM introduced a burning mechanism to remove part of the ETH from the blood circulation to ensure the foundation of the contraction survival over time. These metal currencies are taken from ethereum gas fees and permanently removed from the width.

The integration, which represents the ETHEREUM transition from the proof of work (POW) to the mechanism of consensus (POS), aims to enhance this concept by ensuring the burning of more ETH of the product.

However, after the Dencun upgrade last year, which presented points and reduced transactions, less ETH and more repeated. This causes the ether to become an enlarged. With the burning rate of ETH around its lowest level since the merger, inflationary pressures intensified on the encrypted currency.

“The last ETHEREUM performance can be largely due to the decrease in the network activity, as it is clear from the low active addresses and low transaction drawings. These factors, as well as the decrease in the burning rate after the DENCun upgrade and the continuous high inflation rate, continue to exercise the pressure pressure on the origins.”

ETH 4 % decreased daily

Moreover, egyhash stated that Ethereum has an opportunity for potential recovery if there is a positive change in network activity – an increase in active headlines, which may lead to high transactions fees and more ETH.

At the time of writing this report, the value of ETH was $ 1790, a 4 % daily decrease in Coinmarketca. It is worth noting that the basic principle was negatively affected by the declaration that confirms the implementation of commercial tariffs in the United States.

Moreover, ETHER lost 16 % of its value last month and decreased by more than 60 % since the peak of this session by more than $ 4000.