Why the Fantom Network Surged in Transactions but FTM Demand Plummeted
On November 24, 2023, the Fantom network saw a record-breaking surge in transactions. However, the demand for FTM, the network’s native cryptocurrency, continued to fall.
Record Transactions on the Fantom Network
The surge in activity on the Fantom network was attributed to the recent launch of the Fantom Inscription FRC-20 protocol on the blockchain. This led to a significant increase in daily transactions on the network, reaching a peak of 2.94 million transactions.
Gas Fees Soared
The surge in transactions also caused gas fees on the network to skyrocket, reaching a peak of 11,000 GWEI. As of the time of writing, the average gas fee on the Fantom network was 3,379 GWEI according to FTMScan.
FTM Fails to React
Despite the surge in transactions and gas fees, the price of FTM did not witness a positive price reaction. The altcoin continued its decline, falling further by 0.44% in the last 24 hours. CoinMarketCap reported that FTM’s price had fallen by 14% in the last week, making it one of the crypto assets with the highest losses in the past seven days.
Decline in Trading Volume
In addition to the price decline, there was also a steady fall in daily trading volume in the last week. Data from Santiment showed that the volume of FTM traded daily fell by 82% between November 16th and 23rd. Even on November 22nd, when the network logged a record high in daily transactions and gas fees, FTM trading volume experienced a 37% decrease.
Plummeting New Demand and Trading Activity
Data from Santiment also showed a significant decrease in new addresses created to trade FTM and a drop in the number of unique addresses involved in FTM transactions daily. This coincided with the altcoin’s price fall in the last week.
Market Value to Realized Value Ratio
Investors may have shied away from trading FTM due to its Market Value To Realized Value ratio (MVRV), which continued to plunge. At -39.58% at press time, FTM’s current market value was lower than the average price at which it was last purchased.
In conclusion, while the Fantom network experienced a surge in transactions, the demand for FTM continued to fall. The plummeting price, decline in trading volume, and the MVRV ratio indicated a lack of confidence among investors, leading to a decreased interest in the altcoin.
### News source: eng.ambcrypto.com