- ETH fell by 6.18% in 24 hours.
- Ethereum’s daily active addresses decreased by 18.32%, from 382,000 to 312,000 year-to-date.
Ethereum (ETH) has seen a sharp decline over the past week. Over this period, ETH decreased by 5.46%. In fact, at the time of writing, Ethereum was trading at $2,480. This represents a decline of 6.18% over the past day.
Prior to this, ETH was on an upward trajectory, increasing by 1.57% on the monthly charts. However, since reaching a high of $2,729, the altcoin has failed to maintain upward momentum. Thus, recent losses almost exceed monthly gains.
The recent losses on the price charts are not an isolated case, as the altcoin has also declined in other aspects, including active addresses.
Ethereum Daily Active Addresses Decline
According to Cryptoquant, much like Bitcoin (BTC), Ethereum saw a sustained decline in active addresses throughout the year.
Source: Cryptoquant
Based on this data, Ethereum’s daily active addresses increased from a high of 382,000 to 312,000.
Analysts cited the main cause of this decline as the lack of new investors. So while 2024 saw an increase in liquidity following the approval of Ethereum ETFs, on-chain activities do not reflect this.
Likewise, the expected recovery following the Fed’s rate cuts has not materialized. This market failure means that no new addresses have entered the market.
Implications for ETH Price Charts
Notably, a drop in daily active addresses, as noted above, generally results in lower prices.
However, despite the drop in active addresses, current market conditions could allow Ethereum to see a significant recovery on the price charts.
Source: Santiment
For example, the aggregate Ethereum funding rate per exchange has seen a sustained rise, remaining positive over the past week. This signals growing demand for long positions as investors anticipate further gains.
The fact that investors are holding long positions despite falling prices speaks to market confidence.
Source: Coinglass
This demand for long positions is further supported by a positive open interest weighted funding rate.
Source: In the block
Additionally, outflows from large Ethereum holders decreased from a high of 311.95K to a low of 139.39K. This suggests that large holders continue to accumulate their assets and continue to hold their positions despite the market slowdown.
Such holding behavior suggests confidence in the altcoin’s future.
Read Ethereum (ETH) Price Forecast 2024-2025
Therefore, despite the drop in active addresses, ETH has shown strength on the price charts. This implies that the market is enjoying overall positive sentiment.
As such, ETH could recover and reclaim the next significant resistance level at $2668. However, if the current decline persists, ETH will find support at $2,728.
