Ethereum, the second-largest cryptocurrency by market value, is going through a rough patch. According to crypto trader EgyHash from CryptoQuant, network activity has been slowing down, putting Ethereum in a difficult position. Compared to Bitcoin, its performance has fallen to levels last seen in 2020, raising concerns about a possible 91% price crash.
EgyHash points to declining network activity as the main cause of Ethereum’s troubles. Since the beginning of the year, the number of active addresses has been dropping steadily. This slowdown has led to lower transaction fees, which affects Ethereum’s overall value.
Blockchain data confirms this trend. The average transaction fee and block fee have hit record lows, making Ethereum less profitable for validators. This, in turn, has weakened its ecosystem.
Investor confidence in Ethereum is also slipping. Data from Santiment reveals that large investors, known as whales, have sold 760,000 ETH—worth about $1.42 billion—in just two weeks.
Whale activity has dropped by 63.8% in the last five weeks, which is a worrying sign. If big investors continue to sell, Ethereum could face more downward pressure and a major sell-off.
Ethereum’s deflationary mechanism, which burns transaction fees to reduce supply, has weakened due to lower network activity. Since the Dencun upgrade, the burn rate has dropped to its lowest level since Ethereum switched to proof-of-stake. This has increased supply and added inflationary pressure, which could hurt the price even further.
EgyHash warns that unless network activity and transaction fees pick up, Ethereum will struggle to maintain its value. If inflation keeps rising faster than demand, the price could stay under pressure for a long time.
Crypto analyst Ali Martinez has raised alarms about a potential Ethereum collapse against Bitcoin. Based on the ETH/BTC chart, he predicts that Ethereum could drop by 91% if a bearish pattern plays out.
Martinez explains that when flipped upside down, the chart reveals a double-top pattern, which often signals a major decline. If this pattern holds, ETH/BTC could fall to 0.0020 BTC.
Right now, Ethereum is trading at 0.02153 BTC ($1,766). A drop to 0.0020 BTC would be devastating for holders.
Despite the concerns, there is still a chance for a rebound. If Ethereum holds above the $1,800 support level and starts recovering like Bitcoin, it could push past the $1,900 and $1,950 resistance levels.
Ethereum is at a critical point. Its future will depend on whether network activity improves and investor confidence returns. Until then, the risk of further losses remains high.
ETH’s price is dropping due to low network activity, reduced transaction fees, whale sell-offs, and inflationary pressure from the Dencun upgrade.
Dencun lowered Ethereum’s burn rate, increasing supply and inflationary pressure, which could further weaken ETH’s price stability.
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