Ethereum's ETH Struggles to Reclaim $3,400 Amidst Increased Supply and Mixed Market Sentiment

Ether, the native cryptocurrency of the Ethereum blockchain, is facing challenges in reclaiming its previous high of $3,400 amidst increased competition and mixed market sentiment. Despite the Ethereum network's ongoing upgrades and improvements, the price of Ether has struggled to maintain its momentum.

The Ethereum network has seen a significant increase in its total token supply, with the current supply reaching 120,521,523 ETH, an increase of 383 ETH since the Merge upgrade in 2022. This increase is attributed to the Dencun upgrade, which introduced several changes to the Ethereum system, including new features that may have unintentionally caused an increase in ETH issuance. This situation raises questions about how Ethereum's deflationary methods balance the risk of inflation if future upgrades continue producing more ETH.

Ethereum's co-founder, Vitalik Buterin, has projected the Pectra upgrade to be deployed in March. The upgrade is expected to increase the blob target to 6, marking a 100% rise to spur developers. This move will double the scaling capacity of layer 2 networks, impacting transaction volumes and efficiency. However, the ETH price has struggled despite upgrades projected to drive adoption.

The Ethereum network continues to undergo changes, boosting its scalability amidst tight competition from new networks. Buterin has rolled out several network upgrades focusing on decentralization and scalability. Despite improvements to community core values paving the way for developer and user integration, the network has struggled to attain projected growth. Ethereum is the largest smart contract network, hosting various decentralized applications that lead to new users.

According to several commentators, the network stands to gain from increased DeFi adoption and a spike in transactions. At press time, ETH price trades below $3K amid frequent dips sparked by low sentiments. The asset is expected to lead the next bull run as momentum soars in the United States.