Ethereum network drops to 6-month low – here's how it impacts ETH

  • Ethereum fees hit a six-month low over the past seven days.
  • ETH declined by 6% and looked bearish on metrics.

As L2s continue to grow in popularity, of ethereum [ETH] Network usage declined, reaching a six-month low.

This is in line with Vitalik Buterin's 2020 roadmap, which aims to increase scalability by offloading transactions from the mainnet.

Meanwhile, ETH bears entered the market and pushed the price of the token lower.

Ethereum's network activity has decreased

IntoTheBlock recently posted a do Highlighting the fact that ETH fees fell to a 6-month low this week as it declined by more than 29%.

The decline in ETH fees reflects a change in activity on more than 50 live Layer 2 networks. To see what's happening with Ethereum, AMBCrypto analyzes Artemis data,

Notably, there was a decline in daily active addresses of the blockchain last week, as well as a decline in overall activity on the network.

Ethereum active addresses declined

Source: Artemis

ETH daily transactions also followed the same trend. Blockchain revenues also declined last week due to the decline in fees.

In particular, it was surprising to see a decline in blockchain usage when the price of gas dropped. According to YchartsThe gas price of ETH dropped from 47.5 Gwei to 8.5 Gwei in the last month.

Ethereum turns bearish

While the blockchain's network activity decreased, its price action also turned bearish. According to coinmarketcapThe price of ETH has fallen by more than 6% in the last seven days.

At the time of writing, it was trading at $2,920.99 with a market capitalization of over $350 billion.

AMBCrypto's look at Glassnode data revealed a possible reason behind this price drop. We found that the number of addresses with more than $100k of ETH balances has plunged over the past seven days.

This clearly indicates that whales were selling their stake.

ETH whales were selling

Source: Glassnode

Not just whales, but overall sell sentiment dominated the market. Our analysis of Sentiment's data shows that exchange inflows of ETH have increased twice in the past week.

Also, its supply on the exchanges increased. This gave a sell signal, which could trigger a price correction.

Negative price action also had a negative impact on market sentiment. Ethereum's weighted sentiment has declined over the past few days, suggesting that bearish sentiment was dominant around the token.

Selling pressure was high on ETH

Source: Sentiment

AMBCrypto then analyzed the daily chart of ETH to see if further price declines are likely.

We found that its Relative Strength Index (RSI) was resting below the neutral mark. Its Money Flow Index (MFI) also recorded a decline.

Reading of ethereum [ETH] price prediction 2024-25

At press time, the king of altcoins was resting below its 20-day simple moving average (SMA), indicating further price declines.

ETH price has touched the lower boundary of the Bollinger Bands, which could trigger a trend reversal.

ETHUSD 2024 05 11 11 58 53

Source: TradingView

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