Ethereum is experiencing some tough times. After reaching highs of $3,432 in January, the price of Ether has dropped nearly 50%, touching a low of $1,750 in March 2025. Although there’s been a small rebound, the token’s price has failed to break above the $2,000 mark and is showing signs of weakness.
Ethereum’s recent performance is being mirrored in its network activity. Onchain data shows that the daily transaction count has fallen to levels not seen since October 2024, before Donald Trump’s presidency. Low transaction fees are also raising alarms, hitting an all-time low of just 0.00025 ($0.46) in late March.
So, what’s going on with it? Low transaction fees and activity generally indicate that interest in the platform is slowing down. Think of it like a crowded concert with less hype – people just aren’t as interested anymore, and fewer transactions are happening on the network.
Why Transaction Fees Matter
In the past, their fees spiked, especially during the 2021 DeFi boom. High demand for block space made gas fees surge, driving up the price of ETH. But now, with the decrease in fees, there’s less demand for their services – and less demand means a drop in price.
Historically, lower fees signal lower market confidence, which puts pressure on the token’s value. The price of Ether is highly correlated with network activity, and since things are quiet, its price is feeling the pinch.
Rising Inflation and Decreasing Burn Rate
Another major issue for it is its increasing inflation. The ETH burn rate, which was once a deflationary force, has plummeted. With the transition to proof-of-stake (PoS) and the implementation of the London hard fork in 2021, it used to burn a portion of transaction fees, but now that burn rate is almost non-existent. This means more ETH is being issued than is being burned, leading to an inflationary supply. As a result, their supply is rising again, which also weighs down its price.
Bear Flag Pattern Signals $1,230 Target
Ethereum’s price chart shows a bearish pattern known as a “bear flag.” This formation suggests that the token could be in for a major drop if it breaks below the $2,000 level. The target for this potential drop? Around $1,230 – a 40% drop from the current price.
Even though some traders are optimistic about a potential bounce back, their current outlook looks grim. Some analysts believe ETH is “undervalued” and could be bottoming out, but there’s still a lot of uncertainty in the market.
What’s Next for ETH?
If the token does drop to $1,200, it’ll be a big blow to the crypto market. But if it can break through resistance levels, it might surprise us and recover. Either way, the coming weeks are crucial for Ether, and only time will tell if the $1,200 price target will come true.
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