Why did the Ethereum price drop today?

Furthermore, the total value tied up in Ethereum-based smart contracts has also fallen by 4.49 percent in the past 24 hours.

While several analysts say Ethereum is still a good investment, on-chain data paints a grim picture of near-term price prospects. Below you will find three reasons why the Ether price has fallen today.

Ethereum has gone inflationary again

What is striking is that daily gas costs on the Ethereum network have dropped from $12.8 million on June 13 to $2.9 million on December 16. In addition to these falling costs, the ETH network also had far fewer daily active users (DAUs). Namely, it fell from a peak on July 26 of 961,196 users to just 367,000 DAUs on December 16.

The Ethereum Merge tokenomics are designed to help Ether become deflationary. However, with falling gas costs and reduced DAUs, Ethereum has become inflationary by 0.073% in the past 30 days and added more than 7,100 Ether. That is not good news for the Ethereum price.

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