Experts suggest that Ethereum will return to a downturn due to increased chain activity and high consumption of crypto gas.
The network saw increased on-chain activity over the weekend, consuming more gas and thus burning a large amount of ether using the EIP-1559 burn mechanism that was approved in August last year.
According to the Ultrasound.Money indicator, the XEN coin network may be one of the highest consumers in the current period. Over the past day, the network has burned more than 210 ether, which is close to $260,000.
This rate includes more consumption than what is consumed by the OpenSea market, the asset of Tether, and the Unisoft platform, and this is why the Ethereum issuance is close to zero, or about 0.0011% annually.
What is XEN Network?
In the same vein, the XEN cryptocurrency project was created by the Fair Crypto Foundation, supported by Jack Levine, a Google employee who specializes in working on cloud infrastructure.
The project aims to empower the user without central lists, prior issuance, administrative keys, or immutable contracts, but some experts classified it as a fake Ponzi scheme, especially after observing the similarities between it and the HEX token.
The project was released in October, so people can request, mint, and mortgage the project’s currency, and then it takes more gas. Investors embraced this new build in crypto, but XEN quickly fell 98.7% from its peak to $0.00037.
Coinage raises the price of gas
Mining has caused the price of gas to go up, thus pushing down the price of Ethereum, and experts have noted a huge contraction of the crypto asset as on-chain activity picks up.
On the other hand, the ether stack is on the rise, according to the Beaconcha.in platform, there are 15.6 million stakes of ether, worth $19.4 billion at current prices, in addition to the accumulated value, which represents about 13% of the supply.
On the other hand, the Shanghai Ethereum upgrade may begin in March next year, under which the EIP-4895 update, which provides stack withdrawal from ether, will be implemented.
What is the price prediction for the Ether asset?
There are positive factors affecting the price of ether, but prices are still witnessing declines, as ether reached $1,280 this weekend, indicating the failure of the asset to overcome the resistance above this level.
As a result, the crypto-asset fell during the Asian trading session on Monday morning, with ether trading down 2.2% during the day at $1,244 at the time of writing, according to CoinGecko.
The asset has seen some kind of caps since the FTX crash in early November, with the asset declining by 74.5% from the $4,878 price it was in in 2021.
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