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From a fundamental point of view, the Ethereum network is in great shape. However, forecasts for the ETH exchange rate do not yet share this optimism
It has already been 100 days since that momentous day when the entire Ethereum mainnet, as part of the long-awaited Merge update, moved from the extremely energy-consuming Proof-of-Work (PoW) mechanism to an energy-saving Proof-of-Stake (PoS) algorithm.
The Merge update was the most significant in the history of Ethereum, but by no means the final one. The network continues to develop, and its first hundred days after Merge have generally demonstrated the stability and viability of the blockchain.
On December 24, the developer of ETH under the nickname superphiz reminded readers on Twitter about this round date and about the positive contribution of the Merge update to the global cause of environmental protection. He stressed:
"We didn't have to do it, we could have buried our heads in the sand and made excuses for ourselves, but instead we just did the right thing."
According to Beaconcha.in , at the moment, there are 15.7 million ETH in the protocol at the stake. This is about 13% of the total supply of coins, which at the current exchange rate is about $19.2 billion.
Currently, the Ethereum network is supported by over 490,000 active validators, and it operates at almost one hundred percent capacity. This distinguishes it favorably from the recent situation with the bitcoin network (BTC), where last weekend there was a drop in hashrate by 35% (according to other data by 38%) due to power outages against the background of bad weather in the US states with a large concentration of miners.
Twitter user @Ethprofit drew readers' attention to this difference by writing:
"This is what the real stability of the network looks like, while the security of the BTC network decreased by 30% the day before because it was too "cold"."
Source: Twitter
In addition to staking, another pillar on which the stability of the Ethereum network is based is its largest NFT ecosystem in the world. According to Nansen analysts, in 2022, NFTs worth $23.7 billion were issued and sold on the basis of the Ethereum blockchain. At the same time, the network is ahead of the second largest NFT ecosystem, Solana, by a large margin in terms of activity.
Source: Twitter
Meanwhile, the issue of new coins is now almost zero, according to the tracker Ultrasound.Money, which supports the deflationary characteristics of ETH. The volume of coinv supply is growing, but the annual growth rate is only 0.012%. In addition, the indicator has slightly rolled back from the maximum value of 121.3 thousand ETH.
Nevertheless, all these optimistic indicators are not yet reflected in the dynamics of the coin rate. At the time of writing, it was trading around $1,220, showing very low activity.
At the same time, analysts fear that the future prospects for ETH look very bleak, and that it may soon break through the current support. Cryptanalyst @Bleeding_Crypto wrote about this the day before, highlighting a number of bearish technical indicators:
Source: Twitter
Another analyst @profit8lue noted a bearish triangle on the chart and predicted on this basis the likely fall of ETH to $ 1080.
