The price of Ethereum has undergone an immersion, since the activity has seen the historical highs of $ 1,400 in January of this year. At the time of writing, an Ether is priced at $ 104, which is a 93% drop in less than a year.
The transaction count saw a sharp increase compared to the end of 2017, reflecting the price of the ether and reaching the historical highs of 1,349,890 transactions in January, just when the price of the asset reached peak.
Following the fall in the price of the ether, transactions fell sharply in the months before until September, when the transactions began to fluctuate sideways despite the continued decline in prices.
In September, the transaction count fell to an annual low of 430.315, but has since stabilized around the 500,000 level. This year is the first time that the two parameters show a divergence and for a significant period of time.
According to studies that have been conducted previously, the price of Ether directly related to the transaction count. More transactions are recorded on the blockchain leading to an increase in demand for the underlying asset that supports its price accordingly. The decrease in transaction counting has a similar effect in depressing the price of the asset. However, since September, this correlation has not been true at all.
A plausible theory that is circulated to explain the divergence is that the price of Ethereum is manipulated by whales (investors with huge resources). In September, the exchange of cryptocurrencies battling Bitfinex was actually charged with manipulating Ether's prices. This accusation has never been proven, even though the evidence seemed to indicate the exchange.
In recent months, Ethereum has suffered from a series of negative news regarding the third network by market capitalization. Starting from a BitMEX report that seemed to confirm it ICOs have been depressing the price of Ether selling the huge quantities of coins they had collected during their ICOs.
More recently, reports are steadily increasing that most miners in the Ethereum network are operating at a loss, causing the industry to panic that the network risks losing one of its most important components, its miners. Mining is profit-driven and if profits are minimal or non-existent, miners will change to achieve better returns or effectively close the store. If the price of the ether continues to fall, this scenario will surely happen.
It is not obvious why the divergence between the two parameters exists but the fact that the transaction count has remained relatively stable in a lateral trend could give some investors a ray of hope that the price of the ether could rebound for the better.