The global coin market has been under turbulence for a brief period of time. And the torments of digital assets from the crypto directory find no ends meet. The state of market leaders Bitcoin and Ethereum has been deteriorating, as these remain the first to bear the brunt.
Successively, the largest altcoin Ethereum continues to suffer from its limitations. Which have been curbing the flight of ETH’s price projections. Whilst users seek a merger to ETH 2.0, the network’s activity and utilization take a plunge, alongside the burn rate and gas fees. On the other hand, Ethereum runs parallel to the price projection of the S&P 500.
Is This A Sign Of Ethereum’s Downfall?
The gas fees for transactions on the Ethereum blockchain have been taking a fall to the lowest level since August. According to some sources, the 7D MA cost of an Ethereum transaction was $11.14. Which rhythms with that from the mid-last year, post which the gas price took a shot to levels as high as $50. The influence of which was from the ascend of NFTs and DeFis.
Successively, at the time of press, the average gas price is 17 GWEI. The gas price of Ethereum has been on a brisk downfall since the start of the year. On the contrary, the fee burning rate was seen escalating during the rise of NFTs and DeFis. The daily burn rate has been traversing to the south of late. The burn rate on the 9th of March was at 3402.67 ETH.
Learning from Etherscan, the network utilization has taken a fall from 98.64% on the 1st of August 2021. To current levels of ~51%, since the 7th of August. Moreover, 90% of marketplaces have seen a fall in trading volumes, and 80% of DeFi projects are hovering in red in terms of TVL and price. Which justifies the low gas fees and fall in burn rate.
Conversely, Santiment cites that Ethereum is staying surprisingly close to the price of the S&P 500. Which in fact has been more evident than the correlation of Bitcoin with the S&P 500 over the past month. The asset moving in parallel with the equity markets further elaborates the price projection of ETH on the charts.
Concluding, the ebbing network activity does justify the fall in gas fees and burn rate. Which enlightens the interest of folks moving distance from the PoW mechanism. The growing stakes in deposit contracts of ETH 2.0 is another valid rationale. That said, we can expect the ETH price to move in a narrow band until the merger. And the correlation with S&P 500 further elaborates the price metrics.