Ethereum
Is Ethereum Price Under Pressure? An examination of on-chain data suggests…
- The number of addresses on the network has been decreasing for seven days
- ETH supply on exchanges has dropped, reducing potential for a selloff
Although Spot Ethereum [ETH] The ETFs are expected to begin active trading in a few days as activity on the blockchain network is discouraging. AMBCrypto discovered this after assessing the project’s network activity.
At press time, we observed that Ethereum’s active, new, and zero-balance addresses have dropped. By definition, new addresses refer to unique users making their first successful transaction on the network.
Activity is decreasing, but there is a problem
This metric acts as a measure of traction or adoption. On the other hand, active addresses track the number of users participating in transactions. When this metric increases, it means an increase in the level of user engagement and growth.
However, at the time of writing, active addresses had dropped by 15.45% over the past seven days. New addresses were not spared either with a drop of 6.50%.
Source: IntoTheBlock
This development is surprising given the proximity to planned ETF launch est. If this decline persists, the price of ETH could be affected. Indeed, a decrease in Ethereum network activity could lead to a decrease in demand for the cryptocurrency.
According to CoinMarketCap, the price of ETH was $3,379 at the time of writing. This represents a depreciation of 3.35% over the past week.
Another metric looked at by AMBCrypto was the exchange supply ratio. This is the ratio of coins reserved in exchanges, compared to the total supply of ETH.
When the price increases, it means that the number of coins in circulation increases. A potential consequence of this is an increase in selling pressure which could subsequently lead to lower prices.
However, at press time, the ratio appeared to be declining, according to CryptoQuant dataThis decline reduces the risk of a sell-off, as holders appear comfortable with locking up their assets for safekeeping.
Source: CryptoQuant
ETH Traders Are Not Confident
As funds move away from exchanges, the risk of rising prices increases. However, for this to have a positive impact on ETH, buying pressure must increase.
If this is the case, the price of ETH could rise as high as $3,600 in the first days of July. However, if the opposite occurs, the value could consolidate between $3,200 and $3,400.
Additionally, Ethereum’s open interest has fallen from the value it had on June 27. OI, which is its abbreviated form, refers to the value of open positions in the derivatives market.
An increase in this measure implies that traders are involved in many speculative activity. On the contrary, when it falls, it means that traders are closing their existing positions and withdrawing money from the market.
Worth $13.14 billion, ETH’s OI suggests that participants are not holding back from opening positions to capitalize on price movements.
Source: Glassnode
Read Ethereum [ETH] Price forecast 2024-2025
If the value continues to fall, the price of ETH could also follow a downward trend. However, this prediction could be invalid if open contracts increase and buying pressure in the spot market ensues.
If this is the case, ETH could begin a rise towards $4,000.