Is Ethereum’s price under pressure? A look at 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 will begin active trading in a few days, the activity on the blockchain network has been 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: In the block

This development comes as a surprise given the proximity to the ETF’s planned launch. If this decline persists, the price of ETH could be affected. Indeed, a drop in activity on the Ethereum network could lead to a drop 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 held on exchanges to the total supply of ETH.

When it increases, it means that the number of coins present on exchanges is increasing. A potential consequence of this is an increase in selling pressure which could subsequently lead to a decrease in prices.

However, at press time, the ratio appeared to be decreasing, according to data from CryptoQuant. This decline reduces the risk of a selloff, as holders appear to be comfortable locking up their assets for safekeeping.

Source: CryptoQuant

ETH traders are not confident

As funds move away from exchanges, the potential for a move higher increases. However, for this to positively impact ETH, buying pressure must increase.

If this is the case, the price of ETH could climb to $3,600 in the first days of July. However, if the opposite happens, the value could consolidate between $3,200 and $3,400.

Additionally, Ethereum’s open interest has fallen from its value on June 27. OI, which is its abbreviated form, refers to the value of open positions in the derivatives market.

An increase in this metric implies that traders are involved in a lot of speculative activities. On the contrary, when it decreases, it means that traders are closing their existing positions and withdrawing money from the market.

Worth $13.14 billion, ETH’s OI implies that participants do not refrain 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 invalidated if open contracts increase and buying pressure ensues in the spot market.

If so, ETH could start a rise towards $4,000.

Leave a Comment