Ethereum Faces Declining Demand Amid Falling Staking Yields
A report by 10X Research indicates that Ethereum’s appeal is declining due to reduced staking yields and competition from higher-return investment options. Ethereum’s network yields are decreasing, with platforms like Lido reporting lower Annual Percentage Rates (APR). This trend is prompting investors to explore alternatives in DeFi and traditional finance, diminishing the incentive to hold and stake ETH, thereby weakening demand.
Additionally, a slowdown in blockchain activity has affected Ethereum’s burn rate, leading to an increase in its circulating supply and exerting further downward pressure on its price. Consequently, some ETH holders perceive staking as a modest income source rather than a means for ecosystem engagement, particularly as low-cost assets such as meme tokens on other chains, especially Solana, gain popularity.
10X Research notes that Ethereum faces a bearish market trend, with technical indicators like the MACD (Moving Average Convergence Divergence) suggesting decreased demand and ongoing selling pressure. The MACD line is trending below the signal line, indicating a bearish outlook for Ethereum's price, which may decline further if support levels falter.
The report cautions that if interest rates in traditional finance continue to surpass ETH staking yields, Ethereum's value could remain under sustained pressure. While improved market momentum could enhance ETH's price outlook, without increased demand and higher yields, Ethereum may struggle to reclaim previous highs. Currently, Ethereum's competition with high-yield traditional assets and appealing alternatives within the crypto space significantly influence its challenging market position.