Nenad Novaković | Unsplash
By now we could say that the Bitcoin halving has not had a favorable impact on the price of BTC. There will be those who say that this is something that will start to be seen much later, and with much sense, results always happen in the long term and these are not immediate as many would think.
Today we find Bitcoin at a price around $62,500 dollars, although it has dropped by 1.5% in 24 hours. However, over the last 3 days it has been quite stable, ranging from $65k-$63k. The current volume is $21 billion, while a week ago, this value was $24 billion.
We can then notice that its chart shows a bearish inclination, which could make sense in the short term, since historically, after a halving occurs, there tends to be a significant drop as we have mentioned in other articles, and this drop could be much deeper and prolonged over time (bear market).
Another explanation for Bitcoin's price could be that ETFs have lost their income flows to certain extents, such as investors focusing much more on investing in other types of markets, for example the macroeconomic one, and neglecting the one related to cryptocurrencies. It does not mean that it has been completely abandoned, just that there are times to invest and times not to, as a strategy.
Ethereum, on the other hand, is showing a price decrease, with a value hovering around $3,150 per unit. It is common to see that when the price of Bitcoin drops, other cryptocurrencies experience something similar. Although not just any cryptocurrency, it is the second largest by market capitalization consisting of a first-layer blockchain, which has always been controversial due to the high fees in network transactions, which have always been quite high, or at least significant enough to consider other options.
In truth, the high network costs and congestion led to the emergence of second-layer networks that are increasing today, and they are a solution worth considering, especially when mentioning the Dencun update, which would improve scalability and therefore reduce fees.
The inclusion of new protocols in the Ethereum subnetwork meant something very positive for the community, which could translate into the creation of new projects, with a much more inclusive approach where people of different financial means could participate without worrying about the high costs of a transaction, especially through the ERC-20 protocol. The new protocols have enabled an experience similar to a breath of fresh air, in which many of us have become involved, such as with the subnetworks of Polygon, Optimism, or maybe Arbitrum, to name just a few.
Shubham Dhage | Unsplash
Lately the Ethereum fee prices have decreased in such a way that it is being widely talked about. Santiment analysts have stated that the lowest transaction fee has been achieved at a value of $1.12. A drop to levels not seen in 6 months.
This makes some logical sense if we think about the following. The transaction fee price drops, then the transaction becomes cheaper, so there will be higher demand, which is reflected in an increase in users using the network, saturating it again, which causes the fee prices to increase again. The market behavior can have a lot to do with it, as in a bear market it is possible that the network usage decreases significantly, even when not in a full bull run, although it is clear, this is an own observation.
Santiment also mentioned the fact that everything seems to be governed by market sentiment. Because when a maximum price is reached, fees increase, while when a minimum is reached, they decrease substantially. It adds that the recent market pullback could mean an opportunity for Ethereum because the costs would be much lower to participate and interact with the network, which would also impact favorably (from this point of view) on other altcoins.
Post from Santiment on X
There is no doubt that activity on Ethereum and particularly on layer 2 networks has generated a much broader revenue stream compared to the previous year. In the first quarter of the current year, $365 million dollars have been generated, which is astonishing and even more so if we estimate a year-on-year growth of 155%.
The majority of the activity comes from DeFi, which if I'm not mistaken, is the sector that has grown the most since the network's inception. I would even dare to say that it was Ethereum that propelled it and introduced it to a broad scale, where new ways of using cryptocurrency-based money flourished, such as pools and rewards for liquidity provision. If I have made any mistakes, perhaps I should learn more, which is simply exciting and will continue to be as technology evolves.
The Ethereum network is being used more and more. In fact, it is reaching the levels of 2021, with a current average of 1.15 million daily transactions, which is impressive. Everything seems to indicate that both Ethereum and layer 2 networks will see a bullish push when least expected.
- Main image edited in Canva.
- I have consulted information in cryptonews.com.
- I have used Hive Translator to translate from Spanish to English.
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It's sad to hear about bitcoin too. @vikvitnik
I am also waiting for something interesting to happen in the world of cryptocurrencies after the bitcoin halving and without a doubt everything is normal and prices remain a little stable. Where Ethereum has an excellent project where they have achieved great performance.