The price of Ethereum has dropped steeply in the past few days (quotation in real time), losing nearly $ 200 at one point. According to a recent report, the drop in prices came shortly after the top 100 ETH addresses by amount of tokens owned sold over 1 million tokens.
The recent drop in ETH prices expected from sell-offs?
Until a few days ago, ETH's price was growing. The second largest cryptocurrency by market cap has risen to its two-year high at around $ 2. With such an impressive bull run, the community wondered how long it would take Ethereum to exceed $ 490.
However, the situation has drastically reversed. Instead of setting a new high, ETH started to lose value rather quickly. The asset first dipped below $ 400 and then bottomed out at around $ 310, losing around 35% in value in the process.
Data collected by analyst firm Santiment reveals that Ethereum's whales may have anticipated the curve. As the price of ETH accelerated towards its recent high, the top 100 richest ETH holders on the market started selling their tokens.
Eventually, the company concluded that such addresses "have reduced the tokens held from 16,92 million to 15,89 million in the past week." This means a "significant" drop of over 6%, which, according to Santiment, was "almost certainly a fuse" for the rapid drop in prices.
The high use of the network highlights the inefficiencies
A recent report indicated that the number of developers using the network has increased since 2018. In fact, Ethereum-specific code packages downloaded in 2020 outnumber 2018 and 2019 downloads combined.
Additionally, the Medalla testnet attracted over 1,1 million Ether tests, a substantial increase from the previous week's numbers. Medalla serves as the final testnet before the official launch of the Ethereum 2.0 network, which aims to initiate the transition from the current proof-of-work to proof-of-stake consensus algorithm.
The 38.000 active validators who have staked their ETH are already earning returns. Ultimately, these developments have mixed effects. While the increase in usage implies that more and more users are using the Ethereum blockchain, it also highlights notable problems.
The network became almost constantly clogged. The Ethereum mempool shows over 160.000 pending transactions at the time of writing these lines, which skyrockets fees on the network.
In early September, average fees paid jumped to an all-time high of around $ 6,60. ETH miners take full advantage of this as their profits have skyrocketed. But users are waiting for the release of ETH 2.0 hoping it will improve their experience. Otherwise, they may start exploring other options.
