Keywords: Ethereum, Ethereum, transaction volume, activity, decline

Amid the turbulence of the digital currency market, Ethereum, this shining pearl, has recently received bad news: the transaction volume of Ethereum has dropped sharply and the activity has dropped sharply. This news has caused quite a stir in the digital currency industry, and people can't help but explore the reasons behind it and the future development direction.

Ethereum has always been famous for its smart contracts and decentralized application platforms, but recent transaction data is surprising. According to statistics, the transaction volume of Ethereum has dropped sharply and the activity has dropped sharply, which has undoubtedly brought a huge impact on the entire Ethereum ecosystem. So, what exactly caused this phenomenon? Next, let's analyze it in depth.

First of all, an important reason for the sharp decline in Ethereum transaction volume is the fluctuation of market sentiment. Recently, the global digital currency market has been in a turbulent state, and the prices of mainstream cryptocurrencies such as Bitcoin have fluctuated greatly, and investor confidence has been affected to a certain extent. This emotional transmission effect has inevitably affected Ethereum, causing some investors to choose to wait and see or switch to other assets, resulting in a decline in Ethereum transaction volume.

Secondly, Ethereum network congestion and rising transaction fees are also one of the important reasons for the decline in transaction volume. With the rise of DeFi projects and the popularity of the NFT market, the transaction pressure on the Ethereum network has continued to increase, resulting in longer transaction confirmation times and soaring transaction fees. This has discouraged some users and they have chosen to temporarily avoid the Ethereum network, which has led to a sharp drop in transaction volume. This network congestion phenomenon is undoubtedly a severe challenge for the ecological development of Ethereum.

In addition to market sentiment fluctuations and network congestion, the future development direction of Ethereum has also attracted much attention. Faced with the reality of declining transaction volume and sharply reduced activity, the Ethereum team is actively seeking solutions to revitalize Ethereum. From a technical perspective, the upgrade of Ethereum 2.0 will bring higher throughput and lower transaction fees to the network, which is expected to effectively alleviate network congestion and improve user experience. In addition, the Ethereum team is constantly exploring Layer 2 solutions, such as Optimism and Arbitrum, to improve the scalability and efficiency of the network.

In summary, the sharp decline in Ethereum transaction volume and sharp decline in activity is certainly worrying, but it also gives the Ethereum team an opportunity to reflect and improve. In the future, with the continuous advancement of technology and the efforts of the team, I believe that Ethereum will usher in new development opportunities and continue to lead the development trend of the blockchain industry. Let us wait and see, and witness the brilliant future of Ethereum together!

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Coin Circle (120Btc.com): Cryptocurrency research company CryptoQuant said that the number of transactions on the Ethereum chain has recently dropped sharply, indicating that the market demand for the Ethereum network has begun to decline, which also paints a bearish picture for the short-term outlook of Ethereum prices.

Generally speaking, "transaction volume" is an indicator that reflects and evaluates the total number of transfers on the Ethereum chain. When this indicator is high, it means that traders are active on the network; low values mean less activity on the chain.

CryptoQuant analysts published a chart showing the 30-day exponential moving average (EMA) trend of the indicator:

As shown in the above figure, since Ethereum hit an all-time high in May 2021, Ethereum's 30-day EMA transaction volume has been in an overall decline, and the recent downward trend is more obvious, indicating that the Ethereum blockchain is currently in a "low activity" state, and there is still a lack of demand for Ethereum in the market.

In addition, the price of Ethereum has been in a sideways state for some time, and it is unclear when it can get rid of this trend.