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Ethereum's Future Looks Uncertain as Network's Average Fee Crashes to $0.88

Sun, 07/10/2022 - 14:19
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Arman Shirinyan
Ethereum could face some problems if revenue does not recover
Ethereum's Future Looks Uncertain as Network's Average Fee Crashes to $0.88
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The average network fee on Ethereum took another hit as the value dropped below the $0.9 level, which the majority of users hoped to hold. The dropping average fee could be a worrying sign that shows the state of the network and the whole industry.

The plunge in usage of the network is in addition to the massive plunge of ETH's value, which is down more than 70% since the ATH reached back in November. Such a strong drop in value caused a massive outflow of funds from the network.

With the prices of Ethereum down, the revenue of projects based on the network is also plunging drastically. The DeFi industry, which was one of the main fuels for Ethereum fees and revenue, showed a dramatic fall in the last quarter as the TVL on Ethereum tumbled from $153 billion to $47 billion.

The last time the market saw the average fee of Ethereum at around $0.9 was July 2020, when the price of the second largest cryptocurrency on the market had been moving around the $450 range.

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The potential drop to $500 would deal enormous damage to the network's revenue, moving the average fee even lower, which may cause a further drop in the usage of Ethereum and create an additional problem for existing protocols.

As for the market value of Ethereum, the second biggest cryptocurrency is currently trying to gain a foothold above $1,200 which, if it succeeds, will make ETH's recovery run a possibility if the market faces an increase in inflows.

Previously, the Fidelity analyst told his followers that both Bitcoin and Ethereum are highly undervalued and are close to reaching the bottom of the correction, which is confirmed by technical indicators like the Relative Strength Index and others.

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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.