ETH makes many people regret it!
In this round of bull market, among the four major mainstream currencies BTC, ETH, SOL, and BNB,
Ethereum's performance is the worst:
BTC 174% increase 17.5% retracement from the highest point
ETH 145% increase 42.5% retracement from the highest point
SOL 985% increase 34.8% retracement from the highest point
BNB 236% increase 25% retracement from the highest point
The poor performance of ETH prices has the following reasons:
1. Changes in market supply and demand:
- Increased supply: After the Ethereum upgrade in 2022, the token issuance mechanism was changed, but under the circumstances of reduced network activity, the basic fee decreased, and the destruction mechanism activity also decreased, resulting in an increase in the supply of ETH.
- Reduced demand: The cryptocurrency market is highly competitive, with many competitors and more choices for investors, resulting in the dispersion of demand for ETH.
2. Market sentiment and investor expectations:
- Overall market pessimism: The overall cryptocurrency market is affected by macroeconomic conditions, regulatory policies and other factors, and investor sentiment is relatively pessimistic. Grayscale's Ethereum Trust Fund ETHE has sold/transferred $2.94 billion of Ethereum and still holds $3.92 billion of Ethereum, which is still being sold. In addition, the Ethereum Foundation continues to sell, and the Ethereum Foundation has sold 3,766 ETH this year.
- Changes in expectations for Ethereum upgrades: Ethereum is constantly undergoing technical upgrades. Investors may have high expectations for it before the upgrade, but the effect after the upgrade has not met expectations.
3. Impact of regulatory policies:
- Policy uncertainty: The regulatory policies of countries around the world on cryptocurrencies are constantly changing. Some countries have taken strict regulatory measures on cryptocurrency transactions and even banned related transactions.
- Increased compliance costs: In order to meet regulatory requirements, Ethereum project parties and related companies need to invest a lot of resources and costs in compliance construction, which may affect the development speed and profitability of the project.
4. Technical issues and network performance:
- Network congestion and transaction delays: The Ethereum network may experience network congestion and transaction delays during peak periods, affecting user experience and transaction efficiency.
5. Macroeconomic environmental factors:
- Global economic instability: The global economy faces many uncertainties, etc.
