The Ethereum blockchain, prominent in the crypto world, has recently experienced a significant downturn. Average earnings for Ethereum stakers have plummeted in recent days, signaling a drop in user interest and participation.
Declining Returns for Ethereum Stakers
In a disappointing turn of events, the earnings of Ethereum stakers have seen a stark decline, hitting new lows amid reduced network activity. Users participating in Ethereum’s proof-of-stake model are receiving lower rewards, primarily due to reduced demand and a decrease in transactions, resulting in diminished staking profits.
Market analyst Kyle Doops highlighted this troubling trend on the social media platform X (formerly Twitter), pointing to the correlation between diminished staking yields and reduced transaction volumes amidst a broader market decline.
He reported that Ethereum’s average staker earnings over the last week have dropped significantly, reaching a six-month low of approximately $5.44 million as of September 12.
Additionally, transaction fees have also decreased due to lower network activity, further affecting stakers’ earnings. The overall transaction volume and on-chain activity have dropped dramatically since the highs of March, reverting to February 2024 levels.
Several metrics, including average staker revenue, have shown considerable decline recently. The futures market for Ethereum is also seeing lower funding rates, which have reached new lows.
Doops noted that the futures market is currently experiencing its lowest funding rates of 2024, signaling a persistent bearish sentiment. As these rates decrease, traders appear more cautious, highlighting a growing divide between long and short market positions.
With a continuous bearish trend in the 50-day average funding rate, interest in buying may be dwindling. Without a surge in demand in perpetual futures or spot markets, Doops anticipates that ETH prices could remain subdued.
Is ETH Preparing for a Recovery?
Amidst the negative trends, there are signs that Ethereum’s price is slowly recovering, according to CoinMarketCap. At present, ETH is priced at $2,326, reflecting a modest increase of about 0.61% in the last 24 hours. This recovery follows a decline after hitting strong resistance at $2,388, which temporarily pushed prices down to $2,300.
While ETH has shown slight daily growth, it has still faced declines of over 0.50% weekly and 11.14% monthly. However, Ethereum’s market cap and trading volume have increased by 0.60% and 14%, respectively, suggesting that investors are optimistic about a potential rebound for the digital asset.
