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Ethereum (ETH) Faces Some Obstacles Most Analysts Are Ignoring: Source

Tue, 02/21/2023 - 13:52
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Arman Shirinyan
Ethereum's fundamental growth might not be enough to push price upward
Ethereum (ETH) Faces Some Obstacles Most Analysts Are Ignoring: Source
Cover image via stock.adobe.com

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Ethereum, the second largest cryptocurrency by market capitalization, is facing serious obstacles on the market despite its strong fundamental growth. This is a worrying sign, especially considering the current state of the market.

One of the problems for Ethereum is that even though the growth of network activity, the burn rate and other factors have usually led to an immediate response in the price on the market, the tendency has changed in recent times. This may indicate that there is not enough funding on the market to support the growth of Ethereum.

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While Ethereum has been growing in terms of network activity, with new developments such as the launch of Ethereum 2.0 and the increasing adoption of decentralized finance (DeFi) applications, the price of Ethereum has been stagnant. This is a problem for Ethereum holders and investors, as the network is not seeing the price appreciation that is expected to accompany such growth.

Ethereum chart
Source: Ultrasound.money

At press time, Ethereum is trading at $1,700, down from its all-time high of around $4,300 in May 2021. This is a considerable drop, and it suggests that there is a lack of investor interest in Ethereum despite its strong fundamental growth.

Another obstacle that Ethereum is facing is the issue of high gas fees. This has been a persistent problem for Ethereum users, particularly in the DeFi space. With high gas fees, it becomes more expensive to transact on the Ethereum network, which can be a deterrent for users and limit the growth of the network, despite the most recent steps developers have taken to increase the network's scalability.

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About the author

Arman Shirinyan is a trader, crypto enthusiast and SMM expert with more than four years of experience.

Arman strongly believes that cryptocurrencies and the blockchain will be of constant use in the future. Currently, he focuses on news, articles with deep analysis of crypto projects and technical analysis of cryptocurrency trading pairs.