CryptoQuant named the conditions for the rapid recovery of Ethereum's price.

CryptoQuant noted that the total supply of Ether is again increasing and has reached a new all-time high of over 120.7 million coins. According to the platform's analysts, this marks a departure from the deflationary narrative and a return to the inflationary issuance of the second largest cryptocurrency.

"The Dencun update significantly reduced transaction fees, which led to a decrease in the rate of ether burning to almost zero and reignited the growth of supply. The reduction in transaction costs has weakened the asset's monetary policy. This is a fundamental structural change, so a return to deflationary dynamics in the short term is unlikely," analysts stated.

They said that the activity on the Ethereum network has remained stable since 2021, and metrics such as the number of transactions and active addresses are not showing rapid growth.

Investor interest in Ethereum is declining, and the volume of assets in staking is falling. This indicates a decrease in trust from the community and traditional investment funds, experts from CryptoQuant emphasized.

Earlier, analysts from the Santiment platform stated that the average transaction fee on the Ethereum network has dropped to $0.168, marking the historically lowest level of transaction costs since May 2020.