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Ethereum’s Struggle: Price Hurdles, Declining Revenue, and Rising Competition

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Key Takeaways:

  • Ethereum faces resistance at $2,460, with a breakthrough potentially driving a rally toward $3,260.
  • Declining usage and revenue threaten Ethereum’s position, with competition from Layer 2 solutions and rival blockchains.
  • Strategic shifts, including gas limit changes, highlight Ethereum’s struggle to balance decentralization with efficiency.

Ethereum has been facing many difficulties, both in terms of price resistance and declining network supremacy. The second-largest cryptocurrency has not been able to regain upward momentum, with key resistance levels holding it back from further advances.

At present, $2,460 serves as a major roadblock, with over 10.95 million investors purchasing approximately 64.52 million ETH at that level.

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Breaking through such resistance would rekindle ETH’s uptrend and could push it to the $3,260 target. However, insufficient ongoing demand and shifting network activity contribute to ETH’s difficulties.

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Ethereum’s current position in markets is impacted by its diminishing presence in the broader crypto ecosystem. The network, which was once the leader in decentralized applications and on-chain financing, is losing ground as developers and consumers move to cheaper alternatives.

Gas prices have plummeted by a staggering 88% in a single year, causing a precipitous decline in revenue. This has resulted in a decrease in Ether’s share of total blockchain revenue from 55% in early 2024 to just 24% in early 2025. The competitive blockchains’ lower fees and increased efficiency have made Ether’s previously high fees unsustainable.

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Layer 2 Growth and Ethereum’s Revenue Decline

One major reason for Ether’s problems is its own strategic push towards Layer 2 blockchains. While Layer 2 options reduce network clogging and offer lower transactional fees, they have also helped to contribute to waning revenue for Ether.

As Ethereum burns ETH in fees, a reduction in activity in the mainnet means fewer tokens get burned, slowing down its deflationary model. This has led to a weakening economic outlook for Ethereum, with long-term value implications.

The activity shift has also led to huge project departures. Uniswap, which was earlier generating 11% of Ethereum’s revenue, has begun to develop a blockchain of its own.

Correspondingly, Ondo, a real-world assets platform with nearly $1 billion in assets under management, has announced that it will be exiting its network. This follows a trend towards blockchain platforms with more transactional capacity and fewer fees.

Related Reading : Sui (SUI) Positioned for Strong Price Surge as Institutional Interest Builds

Ethereum Network Surges: 266.6K New Wallets Created in Two Days

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As per Santiment’s data, Ethereum, the foremost blockchain for dApps and smart contracts, reached an important milestone at the close of April. Over April 28th and 29th, there was a huge increase in activity on the Ethereum network, 266.6K new wallets were created – the biggest two-day surge in participation since October 8th and 9th, 2022; this implies that Ethereum’s user base is growing rapidly across all fronts.

This particular growth spurt within its network is interesting considering current market conditions where prices are unstable and cryptocurrencies are experiencing heightened volatility. Despite being affected by bearish trends which push down ETH value, it remains resilient to such shocks as can be seen from high levels adoption among users coupled with increased usage indicated by sustained network activity.

As of the latest available data, Ethereum’s price­ closed above $2,834, currently trading at $2,911.54 with a notable­ $20 billion trading volume over the past 24 hours. This re­flects ongoing market intere­st and liquidity in Ethereum.

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Source: CoinMarketcap

Howeve­r, ETH experience­d a slight 2.72% decline in the last 24 hours and a more­ significant 8.14% drop over the prece­ding seven days. Despite­ these short-term fluctuations, ETH maintains its position as the­ second-largest cryptocurrency by marke­t capitalization, with a current market cap valued at $355 billion, according to CoinMarke­tCap rankings.

Ethereum Short-term Price Forecast

Changelly, a promine­nt platform involved with cryptocurrencies, has share­d insights about Ethereum’s potential price­ trajectory. Their analysis indicates that Ethe­reum (ETH) may experie­nce a decrease­ of approximately 1.17% leading up to May 3, 2024.

In their analysis, Change­lly examined various technical indicators to gauge­ market sentiment. The­ findings reveal a predominantly be­arish sentiment, with a notable 69% of marke­t participants expressing pessimism. Additionally, the­ Fear & Greed Inde­x, a widely followed metric in the­ crypto community, stands at 54, reflecting a neutral outlook among inve­stors.

Changelly looks at historical price data and trends. They have made a projection for what would be the average price of ETH come May 2024 by looking into how it performed at the beginning of 2023. During this time, they predict that Ethereum’s average rate will be around $2,954.94.

However, it is important to note that cryptocurrency markets can be volatile. Therefore, Changelly also gives a minimum and maximum estimate for how much Ethereum may fluctuate in price which is between $2,891.10 to $3,018.78.

Related Reading | Solana (SOL) Market Downturn: Analyst Cautions Possibility of $70-$80 Range

Inverse Finance Loses Over $15M In Oracle Manipulation

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Ethereum based DeFi protocol Inverse Finance [INV] revealed that an anonymous attacker has stolen $15.6 million worth of cryptocurrency. Detailing the incident, Blockchain security firm PeckShield, noted that the attacker exploited a vulnerability in a Keep3r price oracle which Inverse uses to track token prices.

Through a series of tweets, Peckshield experts summarised that the attacker manipulated the oracle into believing that the price of Inverse Finance’s INV token was unusually high, and then extracted multi-million-dollar loans on Anchor using the inflated INV token as collateral.

Drilling deeper, researchers at Peckshield observed that the attacker first withdrew 901 ETH [about $3 million] from Tornado Cash, cleverly removing any trail of its activity. The hacker then used DEXs such as SushiSwap to transfer the stolen assets which resulted in a sharp increase in the price of INV, thus tricking the Keep3r price oracle.

Inverse Finance’s “High Risk” Attack

Using the manipulated price of INV, the malicious actor then took out INV-backed loans on money market Anchor before arbitrageurs brought the price of INV back to normal levels. A representative from PeckShield called the attack a high risk due to the usage of $3 million worth of crypto to deceive the price oracle.

The attacker managed to remove 1,588 ETH, 94 WBTC, 39 YFI, and 3,999,669 DOLA. Although its difficult to track where the funds will end up, Peckshield noted that 73.5 ETH [about $250,000) still remains in the attacker’s original Ethereum wallet.

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Conceived in 2020, Inverse Finance is a suite of permissionless decentralized Finance [DeFi] tools that are said to be governed by Inverse DAO which is a decentralized autonomous organization running on the popular Ethereum blockchain.

Some of its major products include Anchor and DOLA. Anchor is nothing but a synthetic asset and a money market protocol that helps in facilitating capital-efficient lending and borrowing.

Inverse released a statement saying that it has temporarily halted all borrowing activities on Anchor, and is working with Chainlink to build a new INV oracle. The DeFi lender also announced that it plans to make a proposal to its decentralized autonomous organization [DAO] to “ensure all wallets impacted by the price manipulation are repaid 100%,” without providing any further details.

NFT marketplace launch coming up by GameStop

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The world’s largest retail gaming and trade-in destination, GameStop, has planned to launch its own forum for non-fungible tokens (NFT) and is co-initiating an “up to $100 million” repository for game developers using it.

Gamestop has collaborated with Immutable X, an Ethereum Layer 2 network developer for this launch. The company’s announcement came on Thursday, 3 February 2022, along with the news of when the launch of the Immutable X-powered NFT marketplace is, which would be later this year.

The repository for the grant is named in Immutable X’s IMX tokens, specifically 56,209,850 tokens, that are worth over $200 million at the present prices due to the increase in the price of the IMX tokens. However, the fund is clinched at $100 million.

In addition, Immutable X will contribute up to $150 million in tokens of IMX to GameStop on achieving certain breakthroughs. These milestones are inclusive of the NFT marketplace launch, reaching sales volumes of $1.5 billion and $3 billion on Immutable X within a given time frame.

GameStop recently expressed its enthusiasm for blockchain technology when it advertised for a ‘head of Web3 gaming’ and an array of jobs based on non-fungible tokens. These tokens are usually characterized as a way to determine ownership of items in-game, and let players trade articles outside an authorized marketplace like an in-game auction house. A few games, that are played to earn rewards in the real world, use cryptocurrency and NFTs to operate an in-game economy that converts into real money for the players.

Company behind NFT trading card game, Gods Unchained: Immutable

Immutable, the company behind the NFT trading card game Gods Unchained, is also the company that created Immutable X. Immutable X is a podium based on the most sought-after Ethereum cryptocurrency blockchain. It functions on the Ethereum Layer 2 network, explicitly for NFTs.

Immutable podium is determined to placate the biggest drawbacks of Ethereum, like the enormous amount of energy consumed and the exorbitant gas fees which could add a high transaction cost.

The new protocol incorporates huge numbers of sale records into one particular transaction, written to the Ethereum blockchain; through this, Immutable assures to make up for the environmental expense incurred by carbon offsets.

Is Ethereum on the path of Resurgence?

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The price of Ethereum’s native token [ETH] has steadily risen from $3,402 to $3,569, a 5% increase in the last week. The uptrend has received significant support from its on-chain metrics, which have turned green since the beginning of October.
Santiment, an on-chain analytics website, centered its report on key components such as Network Growth, Active Address [AA], Market Value by Realised Value [MVRV], Exchange Inflow, and so on. Here’s what the firm discovered when it looked at both on-chain and social data activity on the Ethereum network.

What are Ethereum’s [ETH] tell-tale signs for its growth structure?

It was found that Ethereum [ETH] experienced the greatest increase in Network Growth and Active Addresses [AA] count since reaching an all-time high of $4,168 in May of this year.

With respect to the Active Address [AA] figures, the data looks promising for the price growth as ETH witnessed the highest amount of AA influx since May. It’s noteworthy to mention that ETH for the first time in history crossed the $3,500 mark five months ago this year, the then AA count, too followed suit as evidenced from the graph.

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Is Ethereum on the path of Resurgence? 9

In the case of Network Growth, the graph depicted an unexpected surge in the metric which is the highest since June 2021. The sudden uptrend points towards a possible short-term price surge phenomenon, according to the report. However, some speculators linked the temporary uptick to recent developments such as Mekaverse amassing non-fungible token [NFT] worth $60 million in sales on Ethereum which generated huge network activity by market participants. Nevertheless, the upswing trend is a piece of good news for future price prospects.

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Is Ethereum on the path of Resurgence? 10

That being said, the report further reviewed the network’s health in terms of MVRV and Exchange flow. Regarding MVRV 30D analysis, Ethereum seemed to be treading very close to the difficulty level of 10% but has sufficient room to expand to 25%. However, the report also injected a note of caution with respect to Market Value by Realised Value [MVRV] and Exchange Inflow in the network.

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Is Ethereum on the path of Resurgence? 11

In a separate report, a prominent analyst under the pseudonym ‘Jaydee_757’ predicted Ethereum’s price might see an astonishing 7,000% increase after witnessing the formation of a fractal indicator from 2017 this year. According to the findings of the analyst, if history repeats, Etheruem could hit $13,000 in the next couple of months.

Despite the bullish cues observed by the above metrics, sell-side pressure continues to haunt the altcoin’s price structure. Santiment noted,

“Seems there might be a little bit more sell-side pressure to be absorbed around price resistance level. That might be a little bit difficult for Ethereum.”

OmiseGo (OMG) Token Surges by 156% Following USDT Integration to Hit $8.79

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OMG tokens might be the hottest crypto asset in the market right now. On August 20, Tether announced the integration of its stablecoin, USDT, on the OmiseGo (OMG) Network. Following the announcement, the price of OmiseGo’s native token, OMG, skyrocketed by almost 160 percent to reach $8.79.

Back in June, after the first partnership with Tether, the price of OMG tokens shot up again; but then it was 20 per cent to a much lesser extent. OMG tokens were struggling to hit the $1 price level in early 2020.

OMG token price bullish

Its price rested around $0.50 following the market meltdown back in March, until major U.S. cryptocurrency exchange, Coinbase, listed the token. The news propelled OmiseGo tokens past the $1 resistance to $2 level before correcting.

OMG tokens price action fluctuations this year are primarily owed to rumours of its partnership with Tether, which are now authentic. Currently, USDT occupies the number three spot, as the third-largest cryptocurrency by market capitalization after usurping Ripple’s XRP yesterday. Furthermore, USDT is also the most traded stablecoin and the most predominant ERC20 token.

The rumours of the partnership were verified back in June, pushing OmiseGo price by 20 percent within hours, hitting the $2 level. Last weekend, OmiseGo tokens were trading just under $2. Following Tether’s announcement yesterday, the price of OMG tokens rallied by a massive 156 percent in 24 hours to reach a multi-week high of $8.79, according to Coinmarket cap.

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OmiseGo USDT integration ease Ethereum Network congestion

At the time of writing, the market value of OMG tokens is $8. The current price comes after a slight receding from highs of $8.79. Tethers integration with OmiseGo has arrived at a perfect time when the DeFi market is hot; and Ethereum is struggling to handle the pressure, as transaction fees on the Ethereum network skyrocket.

After BTC, USDT is the most popular trading pair and handles most transactions on the Ethereum network. OmiseGo’s capacity to multi-trades into a single trade can help unclog the Ethereum Network, relieving the entire ecosystem from high network fees and delays.