While the price of Ethereum (ETH) has dipped substantially since The Merge went live last week, its network activity increased. The data from Glassnode shows that the total number of ETH transactions (7-day moving average) reached 47,982 yesterday, which is the highest level in one month.
On 14 August, Ethereum crossed the price level of $2,000 for the first time in three months. However, the price of the world’s second-most dominant cryptocurrency has plunged by approximately 35% since then. Just in the past five days, ETH has dropped by over 20%.
The rise in the number of Ethereum transactions across the network shows that overall activity has increased. In a massive crypto transfer on Tuesday, a prominent Ethereum address moved 250,000 coins worth more than $338 million to the digital exchange Binance.
“The price of ETH has dipped below a recent support level of $1,400, but there is a much wider market struggle in play that is distracting investors from meaningful improvements to the network. Price volatility is being experienced across the board in crypto thanks to major macroeconomic factors beyond its control – in the same way, equities are experiencing significant sell-offs,” Simon Peters, a Market Analyst at eToro, commented.
Network Upgrade
While the network upgrade of Ethereum has made ETH more energy-efficient, it has increased volatility in gas fees.
“The fall in ETH’s value in the past few days will be pointed to as evidence of the failure and overhype of the Merge – but like any investment and market – it won’t be judged on a tiny snapshot of performance. The Merge was an inherently long-term change to the way the Ethereum network is governed, and how it uses its resources. The promise of overnight miraculous change is an anathema to grown-up long-term sustainable development and should be treated with caution by any investors observing,” Peters noted.
