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Ethereum Could Be Poised for a Big Jump, But There’s a Catch

Prita Ghozie03 mins

Crypto analyst Jamie Coutts thinks Ethereum (ETH) might be about to take off. He’s seeing some positive signs in the market, but warns that Ethereum needs more action before it can really soar.

The Good, The Bad, and The Ethereum

Coutts sees some good things happening for Ethereum:

  • Layer-2 adoption is booming: More and more people are using Ethereum’s “layer-2” networks, which are designed to make transactions faster and cheaper. This means more people are using Ethereum overall.
  • Global liquidity is increasing: There’s more money flowing into the crypto market, which could help drive up prices.
  • Stablecoins are growing: Stablecoins, which are cryptocurrencies pegged to the value of real currencies, are becoming more popular. This could mean more money flowing into the crypto market.
  • Real-world assets are being tokenized:
    More companies are using blockchain technology to represent real-world assets like stocks and bonds. This could bring more investors into the crypto space.

But there are also some downsides:

  • Ethereum fees are low: This means people aren’t using Ethereum as much, which could be a sign that they’re not as interested in the network.
  • Layer-2 growth might hurt Ethereum in the long run: As layer-2 networks become more popular, people might use them instead of Ethereum itself. This could hurt Ethereum’s value in the long run.

The Big Picture: Network Activity Matters

Coutts says that even with the positive signs, Ethereum needs to see a big increase in network activity before it can really take off. Right now, people aren’t using Ethereum as much as they used to, which is reflected in the low transaction fees.

Overall, the crypto market is seeing more users but lower fees. This means people are using crypto networks, but they’re not paying as much to do it. This could be a sign that people are using cheaper alternatives to Ethereum.

Coutts believes that if Ethereum wants to see a big rally, it needs to get more people using it and paying for transactions. Only then will it be able to truly take off.

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