Ethereum (ETH), the second-largest cryptocurrency by market capitalization, has struggled to maintain bullish momentum since August, with its downturn now extending into September. As of today, ETH is trading at $2,338, reflecting a 1.3% dip in the past 24 hours and a 2% decline over the past week. This lackluster performance has left investors uneasy about the asset’s short-term outlook.
A Tough Road Ahead
Prominent crypto analyst Dean Crypto Trades has weighed in on Ethereum’s ongoing slump. In a recent post on X (formerly Twitter), the analyst expressed concerns that ETH’s downward trend could persist longer than anticipated. According to him, Ethereum faces a key resistance level at $2,850, a hurdle it must overcome to shift back to a bullish trajectory. However, he cautioned that the path to recovery may be prolonged, leaving ETH stuck within its current trading range for some time.
Despite these warnings, Dean remained cautiously optimistic, suggesting that Ethereum’s fundamentals may eventually support a rebound, albeit not in the immediate future.
A Glimmer of Hope in Ethereum’s Fundamentals
While Ethereum’s price action has been underwhelming, certain underlying metrics point to a potential recovery. One critical factor to monitor is retail interest in the Ethereum network. Data from Glassnode reveals that Ethereum’s active addresses, which had plummeted from over 589,000 in mid-August to 377,000 by the end of the month, have begun to recover. Since the start of September, active addresses have climbed steadily, now standing at over 438,000.
This uptick in network activity may signal renewed interest from retail investors, which could provide a much-needed boost to Ethereum’s price in the coming weeks. Typically, a rise in active addresses correlates with increased network usage, potentially driving demand for ETH and stabilizing price levels.
Exchange Supply Ratio Shows Promise
Another key indicator to consider is Ethereum’s exchange supply ratio, which measures the percentage of ETH held on exchanges. According to data from CryptoQuant, this ratio currently sits at 0.141, suggesting that a relatively small portion of Ethereum’s total supply is available for immediate trading. A low exchange supply ratio often points to reduced selling pressure, as investors move their assets off exchanges for long-term storage or staking.
If this trend continues, it could alleviate some of the downward pressure on Ethereum’s price, paving the way for a potential rally.
Also Read: Metalpha Deposits $77.55 Million In Ethereum To Binance – Key Whale Moves and Market Impact
Although Ethereum’s short-term outlook remains challenging, the rise in active addresses and a favorable exchange supply ratio provide some optimism for recovery. However, any significant upward movement may take time, especially given the $2,850 resistance level that ETH must breach to regain bullish momentum.
For now, investors may need to exercise patience as Ethereum navigates this volatile period. While the fundamentals suggest that a rebound is possible, the market will need clear signals before ETH can shake off its bearish trend.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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