Is it time to buy the dip in Ethereum's prolonged slump?

The development of blockchain, in simple terms, is about ensuring decentralization while finding ways to make transactions faster and cheaper. The emergence of Layer 2 technology has significantly increased transaction speed on Ethereum while maintaining security and decentralization, meeting the needs of more people. This is how blockchain should be, and it is also the direction for future development.

You should know that although some businesses have moved to Layer 2, Layer 2 still relies on Layer 1 to provide data. The more active Layer 2 transactions are, the more data is transmitted to Layer 1, which in turn increases Ethereum's GAS fees.

Moreover, the expansion of Layer 2 networks has also increased the demand for Layer 1 bridging and staking. Cross-chain and verification processes require Ethereum's GAS, and some transaction data even needs to be recorded on Ethereum.

Even if Layer 2 tries to reduce costs, for example, by using third-party data layers or switching to other tokens as GAS, the final transaction settlement still has to occur on the Ethereum mainnet. When it comes to asset and transaction security, it still relies on Ethereum.

The stronger the Layer 2 ecosystem, the more obvious Ethereum's network effects become, leading to skyrocketing demand for GAS fees and collateral. The current low coin prices are actually due to the network demand not yet picking up; as long as new application scenarios are found, the problem will be solved.

Although high-performance public chains like Solana and SUI have taken some of Ethereum's market share, Ethereum remains the leader in the POS field. First, Layer 2 enables Ethereum to scale while maintaining decentralization, which other public chains cannot achieve; second, Ethereum's ecosystem is far ahead, with Defillama data showing Ethereum (including Layer 2) has a TVL of 72 billion and a stablecoin market of 83.6 billion, while Solana and other “Ethereum killers” combined only have 7 billion TVL and 3.7 billion in stablecoins, which is a significant difference.

For cyclical assets like Ethereum, counter-cyclical operations are the key. In simple terms, buy when the price-to-earnings ratio and price-to-sales ratio are at their highest, and sell when they are at their lowest. The current low activity on the Ethereum network actually provides us with an opportunity to buy the dip.

Position potential coins in advance, like + comment, follow my rhythm, and make a fortune in this bull market!