Key Points
- Ethereum’s network usage has hit a six-month low, reflecting a shift in activity to over 50 live Layer 2 networks.
- ETH’s price action has turned bearish, with a decrease of more than 6% in the last seven days.
Ethereum’s network usage has seen a significant decrease, reaching a six-month low.
This decrease is in line with the 2020 roadmap set out by Vitalik Butarin, which aimed to enhance scalability by offloading transactions from the mainnet.
Shift in Activity and Price Drop
ETH’s fees have also seen a substantial drop, falling by over 29% this week, according to IntoTheBlock.
This decrease in fees reflects a shift in activity to more than 50 live Layer 2 networks.
Concurrently, the number of daily active addresses and transactions on the Ethereum network have also seen a decline.
Interestingly, the usage of the blockchain dropped as its gas price declined, from 47.5 Gwei to 8.5 Gwei over the last month.
The price action of ETH has also turned bearish, with a drop of more than 6% in the last seven days, according to CoinMarketCap.
At the time of writing, ETH was trading at $2,920.99 with a market capitalization of over $350 billion.
Decrease in Whale Holdings
Data shows that the number of addresses with balances greater than $100k has decreased over the last seven days, indicating that whales have been selling their holdings.
This selling sentiment seems to be dominant in the market, with ETH’s Exchange Inflow spiking twice last week and its Supply on Exchanges increasing.
This suggests a potential sell-off, which could have triggered the price correction.
The negative price action has also impacted market sentiment, with Ethereum’s Weighted sentiment dropping in the last few days, indicating a dominant bearish sentiment around the token.
ETH’s daily chart shows that its Relative Strength Index (RSI) is under the neutral mark and its Money Flow Index (MFI) has registered a downtick.
Furthermore, ETH’s price is currently under its 20-day Simple Moving Average (SMA), indicating a potential further price decline.
The price has touched the lower limit of the Bollinger Bands, which can trigger a trend reversal.
