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Ethereum’s future looks bumpy as network loses 5.5% of its locked capital

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Ethereum’s value is currently hovering around its 200-day lows, down more than 60% from its all-time high of $4,800.

  • News of Ethereum’s highly anticipated merge event has failed to garner any monetary support for the digital currency.
  • Ethereum’s monthly losses currently stand at -34%, while the network’s total market share has slipped down to 16.5%.
  • The total market capitalization of the crypto sector currently stands at approximately $1.36 trillion, up 1.7% since June 2.

After having touched the $2,000 psychological threshold on May 31, Ethereum (ETH) has showcased multiple corrections, taking the altcoin below $1,800. At press time, ETH is trading at $1,777 while exhibiting a 14-day loss ratio of 10%.

Earlier this week, Ethereum core developer Tim Beiko revealed that the trial of the highly anticipated Ropsten testnet would take place within the coming week. The trial will serve as a precursor for Ethereum’s switch from a proof-of-work (PoW) to a proof-of-stake (PoS) consensus mechanism.

Despite the news, Ethereum’s price action has remained largely lackluster, even though the altcoin did jump by 10% on May 30, albeit briefly. The final transition, which is slated to take place sometime in August, may yet not have been factored into ETH’s price. A future hike may potentially be on the cards.

Ethereum’s on-chain data has also continued to remain dull. The volume of inflow transactions stayed relatively flat over the past three months. Over the last 7- and 30-day stretches, ETH’s transaction inflows have dropped by 6% and 8%, respectively.

Similarly, Ethereum’s outflow rate, which is determined by aggregating the number of transactions leaving CeFi exchanges for individual wallet addresses, has also been on a decline since March.

The total value locked (TVL) across the ETH ecosystem has dropped by 5.5% since the altcoin started on its monetary downtrend approximately 21 days ago. On May 10, the network’s TVL stood at $28.7 billion, with the metric now down to $27.1 billion. The drop could have been compounded by the recent Terra Luna crash.

How to buy Ethereum

ETH’s price action to remain lackluster?

Despite the upcoming merge event being one of the most significant events in Ethereum’s history, the altcoin has continued to showcase very poor financials. The currency’s valuation remains at a 200-day low, down a staggering 60% from its all-time high value achieved last November.

Volatility in Ether’s inflows and outflows could provide day traders with a lot of leeway to draw profits in the near term. However, any sort of long-lasting bullishness is unlikely to persist.

Disclosure: The author owns a range of cryptocurrencies at the time of writing.

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