ETH price to $1.2K? Ethereum’s PoS ‘deflation’ ends with fees at all-time lows
The post ETH price to $1.2K? Ethereum’s PoS ‘deflation’ ends with fees at all-time lows appeared on BitcoinEthereumNews.com.
Ether’s (ETH) price printed a bear flag on the daily chart, a technical chart formation associated with strong downward momentum. Could this bearish setup and decreasing transaction fees signal the start of the second leg of ETH’s drop toward $1,200? Ethereum’s network activity slumps The market drawdown, fueled by US President Donald Trump’s tariff threats, saw Ether’s price drop by nearly 50% from a high of $3,432 on Jan. 31 to a 16-month low of $1,750 on March 11. While ETH has rebounded 18% since, it failed to produce a decisive break above $2,000 for a second time in less than 10 days. This weakness is reflected in onchain activity, with Ethereum’s daily transaction count dropping to levels last seen in October 2024, before Donald Trump’s presidential election victory. Ethereum daily transaction count. Source: CryptoQuant Ethereum’s average transaction fees also plummeted, reaching an all-time low of 0.00025 ETH ($0.46) on March 24. Ethereum: Fee per transaction. Source: Source: CryptoQuant Low transaction count and fees suggest less demand for block space —whether for DeFi, NFTs or other DApps. It suggests lower network activity, often correlating with diminished interest or market confidence. Historically, Ether’s price has correlated with periods of high network activity. For example, during the 2021 DeFi boom, fees spiked to as high as 0.015 ETH due to high demand. Conversely, lower fees require less ETH, which puts downward pressure on price. ETH supply inflation returns Other key factors weighing down Ether’s performance are its declining burn rate and rising supply. With transaction fees declining, the daily ETH burn rate has plunged to all-time lows, resulting in an inflationary trend. According to data from Ultrasound.money, the projected ETH burn rate has declined to 25,000 ETH/year, and its supply growth has risen to an annual rate of 0.76%, bringing the issuance…
Filed under: News - @ March 26, 2025 12:20 am