Key Points
- Ethereum’s price has dropped to $3,867, indicating possible market volatility.
- Increased Ethereum withdrawal transactions and active addresses suggest heightened retail interest.
Ethereum’s value has experienced a significant adjustment after surpassing the $4,000 mark last week. Currently, Ethereum is trading at $3,867, reflecting a 2.2% decrease within the last 24 hours.
Despite being nearly 30% up for the month, this recent drop puts Ethereum 20.5% below its highest ever recorded value of $4,878 in 2021.
Market Activity and Ethereum
Even with this price correction, Ethereum’s market activity provides interesting insights. As per CryptoQuant analyst Mignolet, there’s been a surge in Ethereum withdrawal transactions from exchanges.
Some may view this as a negative sign, but Mignolet suggests it could hint at “increased market volatility.” He points out a pattern where increased Ethereum transactions often coincide with a decrease in Bitcoin’s dominance, which could signal a wider market pullback as investors cash in their profits.
Key Metrics Indicate Change for Ethereum
In the meantime, the number of active Ethereum addresses, a crucial measure of retail investor interest, has been on the rise in recent months.
Coinglass data shows that the number of active Ethereum addresses has increased from less than 400,000 in early October to over 500,000 at present. This growth suggests a surge in engagement from smaller, retail-focused investors. An increase in active addresses typically indicates increased network activity, which can contribute to Ethereum’s price stability and long-term growth.
Another important metric, Ethereum’s estimated leverage ratio, is currently at 0.487, as per CryptoQuant. The estimated leverage ratio gauges the level of leverage utilized by traders in the derivatives market. It is calculated by dividing the open interest by the total coin balance held on exchanges.
A higher leverage ratio implies increased risk-taking, as more traders use borrowed funds to boost their positions. Ethereum’s current leverage ratio suggests moderate leverage in the market. Though not excessively high, it does point to the potential for more pronounced price fluctuations as traders position themselves for future market trends.
