- The number of addresses in the network has decreased in the last seven days
- ETH supply on exchanges decreased, reducing the potential for a sell-off
Although active trading of spot Ethereum (ETH) ETFs would begin in a few days, the activity on the blockchain’s network was discouraging. AMBCrypto found this out after evaluating the project’s network activity.
At press time, we noted that the number of Ethereum active, new, and zero-balance addresses had declined. By definition, new addresses refer to individual users making their first successful transaction on the network.
Activity is declining, but there is a catch
This metric serves as a measure of adoption or adoption. Active addresses, on the other hand, track the number of users participating in transactions. When this metric increases, it indicates an increase in user engagement and growth.
However, at the time of writing, active addresses had dropped by 15.45% over the past seven days. New addresses were not spared either, with a drop of 6.50%.
Source: IntoTheBlock
This development is surprising considering how close the planned ETF launch is. If this decline continues, the price of ETH could suffer, as a decline in Ethereum’s network activity could mean lower demand for the cryptocurrency.
According to CoinMarketCap, the price of ETH was $3,379 at the time of writing, representing a 3.35% depreciation over the past week.
Another indicator examined by AMBCrypto was the Exchange Supply Ratio. This is the ratio of coins reserved in exchanges to the total ETH supply.
When the price increases, it means that the number of coins on exchanges is increasing. A possible consequence of this is an increase in selling pressure, which could later lead to a price drop.
However, at press time, the ratio appeared to be falling, according to data from CryptoQuant. This decline reduces the risk of a sell-off as holders appear to be happy to lock up their assets for safekeeping.
Source: CryptoQuant
ETH traders are not confident
As funds are withdrawn from exchanges, the potential for a bull run increases. However, for this to have a positive impact on ETH, buying pressure must increase.
If this happens, the ETH price could rise to $3,600 in the first days of July. However, if the opposite happens, the value could consolidate between $3,200 and $3,400.
In addition, Ethereum’s open interest has decreased from its June 27 level. OI, for short, refers to the value of open positions in the derivatives market.
An increase in this value means that traders are engaged in a lot of speculative activities. On the contrary, a decrease means that traders are closing existing positions and taking money out of the market.
Valued at $13.14 billion, ETH’s OI suggests that participants are not afraid to open positions to profit from price fluctuations.
Source: Glassnode
Read Ethereum (ETH) price prediction 2024-2025
If the value continues to fall, the ETH price could also trend lower. However, this prediction could be dashed if the number of open contracts increases and buying pressure builds up in the spot market.
If this happens, ETH could start an increase towards $4,000.
