Is Ethereum's price under pressure? A look at on-chain data shows…

  • The number of addresses on the network has been declining for the last seven days
  • ETH supply on exchanges declined, reducing the likelihood of a sell-off

Although Spot Ethereum [ETH] While the ETFs will begin to be actively traded in a few days, activity on the blockchain’s network has been disappointing. AMBCrypto found this after evaluating the project’s network activity.

At press time, we noticed that Ethereum’s active, new, and zero-balance addresses had decreased. By definition, new addresses refer to unique users making their first successful transaction on the network.

Activity has subsided, but there's a problem

This metric serves 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 there is an increase in the level of user engagement and growth.

However, at the time of writing, active addresses had declined by 15.45% in the last seven days. New addresses also declined by 6.50%.

Addresses on Ethereum's network drop

Source: IntoTheBlock

This development is surprising, as the anticipated ETF launch is very close. If this decline continues, ETH's price could be affected. This is because a drop in Ethereum's network activity could mean 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 decline of 3.35% over the past week.

Another indicator AMBCrypto examined was the exchange supply ratio. This is the ratio of coins reserved at exchanges relative to the total ETH supply.

When it rises, it means that the number of coins present on exchanges is increasing. The likely result of this is an increase in selling pressure which could subsequently lead to a drop in price.

However, according to data from CryptoQuant, this ratio was seen falling at press time. This decline reduces the risk of selling as holders feel comfortable locking up their assets for safekeeping.

Decline in ETH on exchanges

Source: CryptoQuant

ETH traders are not convinced

As funds move away from exchanges, the potential for a bullish trend increases. However, for this to have a positive impact on ETH, buying pressure must increase.

If this happens, the ETH price could reach $3,600 in the first few days of July. However, if the opposite happens, the price could stabilize between $3,200 and $3,400.

In addition, Ethereum’s open interest decreased from its value on June 27. OI, which is its acronym, refers to the value of open positions in the derivatives market.

An increase in this metric means that traders are engaging in a lot of speculative activity. Conversely, when it falls, it means that traders are closing existing positions and withdrawing money from the market.

With a value of $13.14 billion, ETH’s OI indicated that participants were not refraining from opening positions to benefit from price fluctuations.

Ethereum speculative activity declines

Source: Glassnode

Read about Ethereum [ETH] Price Forecast 2024-2025

If the price continues to fall, the ETH price may also move in the downward direction. However, if there is an increase in open contracts and buying pressure in the spot market, this forecast may be invalidated.

If that is the case, ETH could start moving towards $4,000.

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