Ethereum’s price has been freefalling in the past few days, losing nearly $200 of value at one point. According to a recent report, the price drop came shortly after the top 100 ETH exchange addresses dumped over 1 million tokens.
Just until a few days ago, ETH’s price was on a roll. The second-largest cryptocurrency by market cap soared to a 2-year high at about $490. With such an impressive bull run, the community wondered how long it would take for Ethereum to exceed $500.
However, the situation sharply reversed. Instead of marking another high, ETH started losing value rather rapidly. The asset first broke below $400 before bottoming at about $310, losing about 35% in the process.
Data compiled from the analytics company Santiment reveals that Ethereum whales may have been ahead of the curve. As ETH’s price was accelerating towards its recent high, the top 100 exchange addresses began disposing of their tokens.
Ultimately, the company concluded that those addresses “decreased their tokens held from 16.92 million to 15.89 million over the past week.” This means a “significant” drop of over 6%, which, according to Santiment, was “almost certainly a sparkplug” to the massive price dump.
A recent report indicated that the number of developers utilizing the network has been surging since 2018. In fact, the Ethereum-specific code packages downloaded in 2020 exceed the downloads from 2018 and 2019 combined.
Additionally, the Medalla testnet has attracted over 1.1 million test Ethers – a substantial increase from the numbers a week earlier.
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 consensus algorithm to proof-of-stake. The 38,000 active validators who have staked their ETH are already earning returns.
Ultimately, these developments have contrasting effects. While the increased usage implies more and more users are employing the Ethereum blockchain, it also highlights notable issues.
The network has become almost constantly clogged. The Ethereum mempool displays over 160,000 pending transactions as of writing these lines, which skyrockets the fees on the network.
At the start of September, the average fees paid jumped to the highest levels of about $6,60. ETH miners benefit the most from this as their profits skyrocketed. However, users are waiting for the release of ETH 2.0 hoping that it will improve their experience. Otherwise, they might start exploring other options.
