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- Ethereum\u2019s number of wallets in loss reached a seven-month high\u00a0<\/span><\/em><\/li>\n
- Metrics and market indicators suggested that ETH\u2019s price might decline further<\/span><\/em><\/li>\n<\/ul>\n
Over the last few months, Ethereum [ETH]<\/a> witnessed a decline in its network activity. This was the case as the blockchain\u2019s monthly average active addresses dropped. <\/span><\/p>\n
The monthly average of active ETH addresses stood lower than the yearly average. This clearly indicated low activity, which could be taken as a bearish signal. While the blockchain\u2019s network activity declined, its price also failed to shoot up. <\/span><\/p>\n
Is Ethereum\u2019s reluctance to push its price up a consequence of less network activity?\u00a0<\/span><\/p>\n
![\"\"](\"https:\/\/statics.ambcrypto.com\/wp-content\/uploads\/2023\/08\/glassnode-studio_ethereum-active-address-momentum.png\")
<\/a><\/p>\nSource: Glassnode<\/p>\n<\/div>\n
\nRead<\/span> Ethereum\u2019s [ETH] Price Prediction<\/span><\/a> 2023-24<\/span><\/p>\n
\nThe reason for ETH\u2019s price drop<\/strong><\/h4>\n
According to<\/span> CoinMarketCap<\/span><\/a>, ETH was down by more than 9% in the last seven days, reflecting its sluggish behavior. At the time of writing, it was trading at $1,670.05 with a market capitalization of over $200 billion. <\/span><\/p>\n
The price drop had a major impact on investors\u2019 portfolios. <\/span>As per Glassnode Alerts\u2019 tweet, the number of<\/span> ETH<\/span><\/a> addresses in loss reached a seven-month high of 42,602,870.333.<\/span><\/p>\n
\n
\ud83d\udcc8 #Ethereum<\/a> $ETH<\/a> Number of Addresses in Loss (7d MA) just reached a 7-month high of 42,602,870.333<\/p>\n
View metric:https:\/\/t.co\/eTr2V1rqmQ<\/a> pic.twitter.com\/lEkFdTk0XV<\/a><\/p>\n
\u2014 glassnode alerts (@glassnodealerts) August 21, 2023<\/a><\/p>\n<\/blockquote>\n
However, upon taking a closer look, the reason behind the downtrend might not have been less network activity. This was because while ETH\u2019s active addresses dropped, Layer-2s like Base,<\/span> Optimism [OP]<\/span><\/a>, and rollups gained popularity. <\/span><\/p>\n
The primary reason behind market participants shifting to<\/span> L2s<\/span><\/a> was that they offered more scalability. For reference, Coinbase\u2019s L2 Base bridged $251 million, with ETH<\/span> accounting<\/span><\/a> for $155 million out of the total within days of launch.\u00a0<\/span><\/p>\n
A closer look at Ethereum\u2019s state<\/strong><\/h4>\n
A look at Ethereum\u2019s on-chain performance gave a better understanding of what was going on in the ecosystem. Upon checking, it was revealed that investors in funds and trusts, including Grayscale, have relatively weak buying sentiment. <\/span><\/p>\n
Additionally, as per<\/span> CryptoQuant<\/span><\/a>, ETH\u2019s net deposit on exchanges was high compared to the seven-day average, suggesting high selling pressure. <\/span>However, it was interesting to see that when<\/span> ETH<\/span><\/a> fell victim to the latest price correction, investors took it as an opportunity to increase accumulation. <\/span><\/p>\n
This was evident from Glassnode Alerts\u2019 tweet, which pointed out that Ethereum\u2019s exchange outflow volume reached a one-month high during that period.\u00a0<\/span><\/p>\n
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\ud83d\udcc8 #Ethereum<\/a> $ETH<\/a> Exchange Outflow Volume (7d MA) just reached a 1-month high of 9,627.006 ETH<\/p>\n
Previous 1-month high of 9,608.990 ETH was observed on 20 August 2023<\/p>\n
View metric:https:\/\/t.co\/LzFffVHu6i<\/a> pic.twitter.com\/dhJIEP4CZO<\/a><\/p>\n
\u2014 glassnode alerts (@glassnodealerts) August 21, 2023<\/a><\/p>\n<\/blockquote>\n
\nHow much are<\/span> 1,10,100 ETHs worth today<\/span><\/a>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0<\/span><\/p>\n
\n - Metrics and market indicators suggested that ETH\u2019s price might decline further<\/span><\/em><\/li>\n<\/ul>\n