A lack of network activity and competition from other cryptocurrencies could potentially lead to ETH losing support at the $1,600 level. The recent surge in ETH’s price was influenced by the Federal Reserve’s injection of $300 billion, but doubts are now arising about its sustainability. Negative developments in the cryptocurrency sector, such as financial troubles at the Digital Currency Group and legal action against Binance and Coinbase, have added to the bearish sentiment. On-chain metrics also indicate a decline in demand for ETH, with fewer addresses holding significant deposits and a decrease in DApp activity on the Ethereum network. High transaction fees are limiting the number of active users, hindering potential price recovery. Competitors like Solana are gaining traction, further impacting Ethereum’s position. Overall, there is an increased likelihood of ETH falling below the $1,600 support level.
