Besides the price slump within the last few days, leading altcoin Ethereum also witnessed on-chain activity drop over the previous week. IntoTheBlock’s new report indicated that the broad crypto market downturn amid deteriorated financial space saw the top altcoin hitting record low on-chain development in years.
IntoTheBlock discovered a consistent drop in fees to complete transactions within the Ethereum blockchain since last November. Due to the declined trading volumes in the DeFi and NFT spaces, market players remained unwilling to pay the Ethereum network’s fees.
The reduction in fees to utilize the network has revealed a downward network fees pattern, which was common in previous bearish markets. The analytic firm (IntoTheBlock) stated that such fee levels would see Ether becoming inflationary even after the 90% issuance reduction from the Merge.
Besides the fees paid to utilize the blockchain, the ETH Chain has witnessed a dip in new users joining the platform since April last year. It seems migration into a PoS (proof-of-stake) mechanism – the highly awaited event in the crypto space, hasn’t attracted new users.
New addresses joining the platform hit the lowest mark since 2020 – before DeFi summer. That is according to reports by IntoTheBlock. It added that while centralized exchanges could be witnessing new individuals buy Ethereum, new addresses are yet to reflect that as they combine several user holdings in selected addresses.
Thus, despite buying activities by new entrants, the absence of new on-chain addresses confirms a declining demand to utilize the network. Moreover, IntoTheBlock’s noted a slump in searching for ‘ETH’ regardless of the coming Merge.
The report shows an echo chamber, where cryptocurrency native is highly awaiting the Merge, whereas individuals outside the space remain unaware. It added that such a stance could be positive as many won’t learn about ETH’s 99% power usage or the 87% supply issuance up to the Merge’s arrival. Nevertheless, overall interest stays low with prices.
Before you judge the leading alt on the ground of on-chain activity lows, IntoTheBlock discovered a continued demand surge for Ethereum. Long-term market players have decided to hold their $ETH despite adverse market conditions.