After a brief pause, the crypto market resumed its downward trend, with Bitcoin wiping out the previous day’s gains. Altcoins have fallen behind the leading token, as is customary. Traders’ emotions were dimmed by the recent drop in US tech equities. Fears of a rate hike frightened the market once more, while major international events added to the woes.
Ethereum Price Action
Although the price has held above the $3,000 support level, it has yet to fully recover after dropping 4.6 percent over the previous seven days.
If the recent relief rally continues, ETH is likely to retest key resistance over $3,600, where it will almost certainly face resistance.
ETH traders have profited at $3,300 after entering at a significant support level where, based on recent price movement, the market appeared to be stabilising.
Since late October 2021, Ethereum’s network growth has been on a downward trend, according to Santiment. On November 10, the price of Ethereum reached an all-time high of $4,867 before plummeting. Ethereum is now worth $3,213 per coin, down over 33% from it’s all-time highs.
Over the last year, other Layer 1 and 2 tokens have taken a bite out of Ethereum’s market share as more individuals invest in tokens like Solana and Avalanche. NEAR, Harmony, Cosmos, and Fantom, among other other blockchains, look to be gaining popularity.
Many market participants believe that when Ethereum switches from “proof of work” to “proof of stake” in mid-2022, more investors would flock to the network and its native coin, Ether.
“The Merge” is expected to be enabled on the ETH mainnet before June 2022, according to the community.
On-Chain Metrics Hints Bullish For Ethereum Price
At the time of writing, Ethereum was struggling to hold the $3,200 mark, having lost 3.89 percent in the previous 24 hours. According to Santiment, the drop in ETH is primarily due to macro concerns about CPI, inflation, and the Fed’s actions.
ETH’s Daily Active Addresses appear to be solid, despite the lacklustre price swings and fewer new additions. According to on-chain analytics firm Santiment, this could indicate that the network is still extremely active, which is a good sign.
More DAAs signify the more blockchain usage, DAAs (Daily Active Addresses) are a useful technique to track network activity over time. As a result, DAAs are frequently used as a price predictor, as greater demand for network access could translate to increased demand for the blockchain’s primary coin.
Another promising sign is that the volume of ETH traded on exchanges is decreasing even as the price falls, indicating that some market participants are hoarding.