Key Points
- Ethereum (ETH) has experienced a 6.18% decline in 24 hours, with its daily active addresses also reducing by 18.32% YTD.
- Despite the downward trend, market indicators suggest potential for a significant recovery in Ethereum’s price.
Ethereum (ETH) has seen a significant drop recently. Within a week, it has fallen by 5.46% and in the last day alone, it has declined by 6.18%. Currently, the cryptocurrency is trading at $2480.
Ethereum’s Upward Momentum Halted
Previously, ETH was on a rising trend, increasing by 1.57% on monthly charts. However, after hitting a high of $2729, it failed to sustain this momentum. Consequently, the recent losses have almost negated the monthly gains.
This downward trend isn’t just reflected in its price. Ethereum’s daily active addresses have also seen a decline. Data from Cryptoquant reveals a similar trend to Bitcoin (BTC), with a sustained decrease in active addresses throughout the year. Ethereum’s daily active addresses have dropped from 382k to 312k.
Implications for Ethereum’s Price
This drop in active addresses is usually a precursor to price dips. However, the current market conditions could potentially set Ethereum up for a significant price recovery. For instance, Ethereum’s funding rate aggregated by exchange has been consistently positive over the past week, indicating a rising demand for long positions.
This demand, despite the price decline, suggests market confidence. This is further supported by a positive Open Interest Weighted funding rate. Moreover, Ethereum’s large holders outflow has fallen from a high of 311.95k to a low of 139.39k, indicating that large holders are still accumulating assets and holding their positions despite the market downturn.
Therefore, even with the decline in active addresses, Ethereum has shown resilience on price charts, suggesting that the market sentiment is overall positive. As such, Ethereum could recover and reclaim the next significant resistance level at $2668. However, if the current decline continues, Ethereum will find its support at $2728.
