Ethereum

Compound

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<ul> 
 <li style="font-weight: 400">The price of Ethereum (ETH) dropped 13% from $2,719 to $2,330, breaking the crucial $2,400 support level.</li> 
 <li style="font-weight: 400">Analysts predicted this zone as a strong support, but <a href="https://www.cryptopolitan.com/ethereums-price-stumbles-factors-behind-it/">the</a> breach suggests potential further decline.</li> 
 <li style="font-weight: 400">Ethereum’s Total Value Locked (TVL) fell from $34.7 billion to $32.2 billion, indicating decreased demand.</li> 
</ul> 
Ethereum, the blockchain juggernaut, is currently experiencing a notable price stumble, leaving investors and enthusiasts scratching their heads.&nbsp; 
Since January 12, ETH’s price has nosedived by 13% from a comfortable $2,719 to a shaky $2,330.&nbsp; 
This drop isn’t just a blip on the radar; it’s a full-on storm, with the breach of the crucial $2,400 support level sounding alarms across the crypto community. 
<h3 id="span-style-font-weight-400-a-tumble-below-the-safety-net-span">A Tumble Below The Safety Net</h3> 
Ethereum’s dip below the key support zone is a slap in the face for those who saw it as an unbreakable barrier.&nbsp; 
The renowned analyst Ali, known for his independent takes, had previously painted this zone – between $2,388 and $2,460 – as Ethereum’s safety net.&nbsp; 
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If the price held firm here, Ethereum could have danced its way upward with minimal resistance. However, the recent price action tells a different story.&nbsp; 
The last time Ether found itself in this predicament was in May 2022, when it plunged a staggering 63%, bottoming out below $1,000. 
This recent slip below the demand zone, particularly on January 22, is a red flag. It signals potential further declines, with the first line of defense now possibly being the $2,000 level, propped up by the 200-day exponential moving average. 
<h3 id="span-style-font-weight-400-on-chain-analytics-and-user-activity-span">On-Chain Analytics And User Activity</h3> 
Diving into the Ethereum network’s health indicators, the Total Value Locked (TVL) in the ecosystem hit a 19-month peak on January 11 at $34.7 billion.&nbsp; 
But just as quickly, it fell to $32.2 billion by January 22. This 3.1% drop over a week is a tell-tale sign of diminishing demand for the blockchain. 
Moreover, Ethereum’s DApps, the decentralized applications that are the lifeblood of the network, are also bleeding.&nbsp; 
Nine out of the top 10 DApps saw their TVL decline over the past week, with Instadapp and Compound Finance experiencing respective drops of 11% and 9.6%. 
This decline in DApps’ TVL is compounded by a decrease in the number of active addresses using these applications.&nbsp; 
Over the last 30 days, Ethereum’s main DApps have witnessed a 22.65% drop in unique active wallets (UAW). This slump could reflect growing frustration with the network’s transaction costs. 
Market analysts are not painting a rosy picture for Ethereum’s short to medium-term price trajectory either.&nbsp; 
Limbo, an independent analyst, suggests Ether is now a short trade with its price below $2,400.&nbsp; 
Meanwhile, the crypto blogger Market Profit points to a bearish market sentiment, hinting at a potential continued downturn for the largest altcoin. 
However, it’s not all doom and gloom. The potential increase in the use of Ethereum-based protocols and the possibility of a spot Ether ETF could be the silver lining the currency needs for long-term price growth. 
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Additionally, the Ethereum ecosystem is on the cusp of significant upgrades. The Dencun network upgrade, set to be implemented on Ethereum’s testnets in early 2024, promises to reduce gas fees and speed up transactions for layer-2 rollups.&nbsp; 
This upgrade, particularly the EIP-4844, aims to enhance scalability through proto-danksharding, potentially reducing transaction fees by 80%-90%. 
Despite a bug causing a four-hour delay in its deployment on the Goerli testnet, the community remains hopeful.&nbsp; 
The bug, related to Ethereum’s proof-of-stake client Prysm, was swiftly identified and rectified, demonstrating the robustness of the testing process. 
Ethereum’s journey is a rollercoaster, with highs and lows shaping its path. As it braces for further tests and upgrades, Ethereum continues to be a critical player in the blockchain arena.&nbsp; 
Its current price fluctuations are part of a larger narrative that encompasses technological advancements, market dynamics, and user engagement.&nbsp; 
As the story unfolds, Ethereum’s resilience and adaptability will be key in determining its future in the ever-evolving world of cryptocurrencies. 
The post <a href="https://bitcoinworld.co.in/here-are-the-reasons-why-ethereum-price-dropped/">Here Are The Reasons Why Ethereum Price Dropped</a> appeared first on <a href="https://bitcoinworld.co.in">BitcoinWorld</a>.

Here Are The Reasons Why Ethereum Price Dropped

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