Ether (ETH<\/a>) price is down on Dec. 16 and the pre-FOMC rally to $1,350 was obliterated after Federal Reserve chair Jerome Powell issued hawkish statements following a 0.50% hike in interest rates.<\/p>\n The Ether sell-off follows a market-wide decline that has sent Ethereum<\/a> network fees plummeting by 39.90% in the past 30-days. <\/p>\n The total value locked in Ethereum-based smart contracts also decreased by decentralized finance by 4.49% in 24-hours. <\/p>\n Following the FTX exchange scandal, regulators are attempting to fast-track new regulations<\/a> on the cryptocurrency sector. <\/p>\n While some analysts believe Ethereum<\/a> still possesses multiple bullish catalysts that warrant investing in the asset, on-chain data paints a grim picture of its short-term price prospects.<\/p>\n Here are three reasons why Ether price is down today.<\/p>\n Ether price fell as daily fees on the Ethereum network plummeted to $2.9 million, down from pre-FTX levels of $12.8 million on June 13. In addition to the decreasing fees, the network registered lower daily active users (DAUs) from a July 26 peak at 961,196 users to only 367,000 DAUs on Dec. 16. <\/p>\n Post-Ethereum merge<\/a> tokenomics were designed to help Ether become deflationary. However, with gas fees declining and reduced DAUs, Ethereum has turned inflationary by 0.073% in the past 30-days and added over 7,100 Ether. According to ultra sound money, since the merge, Ethereum\u2019s network is inflationary by over 1,192 Ether.<\/p>\n The total value locked metric is a common way to examine the health and sentiment of a Proof of stake (PoS<\/a>) blockchain like Ethereum. Ethereum\u2019s TVL reached a yearly high at $83.9 billion on March 31, but since that point, it has shed nearly $60 billion. As of Dec. 15, the network\u2019s TVL stands at $23.46 billion. <\/p>\n The top 10 Ethereum protocols by market cap<\/a> faced headwinds, with all seeing a drop in TVL and fees over a 7-day period. Notably, MakerDao<\/a> and Uniswap<\/a> (UNI<\/a>) saw 5.82% and 3.49% respective declines in TVL. <\/p>\n On August 9, the Invest in America Act (infrastructure bill) passed Congress and was signed by President Joe Biden<\/a>. Members of the blockchain community blasted the bill <\/a>for what they viewed to be harmful language. The legislation is set to take effect in January 2024. <\/p>\n If Ether is deemed a security in the United States, centralized exchanges (CEX<\/a>) may be forced to delist the altcoin for US-based customers. The security classification could also negatively impact altcoins<\/a>, DApps<\/a> and decentralized exchanges (DEX<\/a>) built on Ethereum. The Securities and Exchange Commission (SEC) has yet to decide if Ether passes the Howey test<\/a>. <\/p>\n The announcement by the Commodity Futures Trading Commission (CFTC) which declared Ether a commodity<\/a> also does not seem to be relieving any investor fears. <\/p>\n![](\"https:\/\/s3.cointelegraph.com\/uploads\/2022-12\/b60b15c6-afb7-41fe-b56d-287767c70bba.png\")
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Ethereum turns inflationary as total revenue falls <\/h2>\n
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A decline in DeFi use aligns with Ether\u2019s price action<\/h2>\n
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Regulatory pressure continues to weigh on investor confidence<\/h2>\n
Investor expectations for 2023<\/h2>\n