Ethereum’s burning mechanism and profitability showing poor results
Ethereum’s battle with inflation continues: the second largest cryptocurrency on the network has been constantly trying to break the inflationary boundary, and its network activity almost turned deflationary before falling once again, leading to another market meltdown. There was a decline and the following profitability decline.
According to IntoTheBlock’s market data, Ethereum’s profitability fell further below the 50% threshold and reached 45%, which is still considered neutral in comparison to other assets on the market, but still below average for Ethereum, which has been historically profitable for the majority of its holders.
The data shows that the majority of Ethereum holders are facing unrealized losses. With such a trend continuing, it will become increasingly difficult for Ethereum in the future, as most investors who suffered unrealized losses and still held assets, would rather break into the cryptocurrency or any other asset. Tend to sell at even. Profitable turn.
The descending trends in profitability and burn rate are two significant factors that affect Ethereum’s value on the market. In the last 48 hours, Ethereum dropped below the important threshold at $1,200 and reached a two-week low at $1,178.
While the decline in price is not significant for Ether, such dynamics create a situation where less flow will be directed towards the cryptocurrency, leading to a further decline in network activity and an increase in issuance.
Unfortunately, Ethereum is completely dependent on the current market conditions and mostly follows Bitcoin and the general movement of capitalization on the market. At press time, the majority of assets on the market are losing their value, as is Ethereum.
