Ethereum could face some problems if revenue does not recover
Average network fees on Ethereum took another hit as the value fell below the $0.9 level, which the majority of users had hoped to hold. The drop in average fees 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 Ethereum prices falling, revenue from network-based projects is also plunging drastically. The DeFi industry, which was a major fuel for Ethereum fees and revenue, saw a dramatic drop last quarter as TVL on Ethereum fell 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.
The potential drop to $500 would cause huge damage to network revenue, further lowering average fees, which could lead to a further drop in Ethereum usage 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 Bitcoin and Ethereum were significantly undervalued and were about to reach the bottom of the correction, which is confirmed by technical indicators such as the strength index. relative and others.
