Ether’s (ETH) prices have printed bear flags on the chart every day, and are a technical chart formation related to strong downward momentum. Do you know that this weakness and reduction in trading fees have begun with ETH’s second leg with $ 1,200?
Ether Leeum’s network activity is slumped
The market, which was fueled by US President Donald Trump’s tariff threat, fell nearly 50% from $ 3,432 on January 31 to 16 months on March 11.
ETH rebounded 18%, but was the second time within 10 days of not getting more than $ 2,000.
This weakness is reflected in the onChain activity of Ether Leeum, which lasted the last level in October 2024 before Donald Trump’s presidential election.
Ether Leeum Daily Trading Number. Source: cryptoquant
Ether Lee’s average transaction fee reached 0.00025 ETH ($ 0.46) on March 24.
Ether Leeum: A commission per transaction. Source: Source: Cryptoquant
Low transactions and fees are less demand for block spaces for Defi, NFT or other DApps. It suggests low network activities and is often associated with market trust that has been reduced.
Historically, the price of Ether is related to high network activities. For example, the fee has soared to 0.015 ET due to the high demand for 2021 Defi Boom.
On the contrary, low fees require little ETH, so the price falls.
ETH supply inflation revenue
Other main factors that lower the performance of ethers are burn speeds and supply rises.
As the transaction fee decreased, the daily ETH video fee plummeted to an all -time low, causing inflation trends.
According to Money’s data, the expected ETH burn rate has decreased to 25,000 ETH/year, and the supply growth rate has risen to 0.76%per year, raising the issuance rate to 945,000 ETH annually.
Yun’s burn speed. Source: Ultrasound. money
As a result, Ether Leeum’s supply has steadily increased since April 2024, and overturned the deflation period, which was converted to a switch switch in September 2022. The total supply of Ether Lee has surpassed the previous chart level as shown in the chart below.
Ether Leeum supply recovers the previous level. Source: Ultrasound. money
The merger has previously eliminated the issuance of mining in the mining infrastructure, which has a high supply inflation rate. Ether Lee also implemented a London hard fork in August 2021 to introduce a mechanism that burns a part of the transaction fee.
relevant: Ethereum has fallen 57% from history, but is still worth more than Toyota.
When the network activity is low, the amount of burned ETH is lower than the newly issued ETH, creating asset inflation.
Etter’s bear flag aims to be $ 1,230.
The ETH/USD pairs can resume general weakness, despite the recent recovery.
In the last 30 days, Ether’s price behavior has formed a Bear Flag pattern on the daily chart as shown below. If the candlestick is close every day under $ 2,000 under the lower border of the flag, the beginning of a large -scale breakdown appears.
The target is set by the height of the flagpole, which is about $ 1,230, down about 40% from the current price.
ETH/USD daily chart featuring bear flag pattern. Source: COINTELEGRAPH/TradingView
Despite this danger, some traders say they are optimistic about Ether’s rising potential, and the analyst Jelle is trying to increase the level of support for $ 2,200.
If this happens, “We will have a monster deviation in our hands,” Jelle added.
Fellow analyst Crypto Ceaser said Ethereum is “badly undervalued” and the bottom is coming from the current level.
This article does not include investment advice or recommendation. All investment and trading measures include risks, and the reader must do his own research when making a decision.