As Ethereum (ETH) grapples with quite a tense market sentiment, crypto investors are on edge, with some sounding cautionary alarms about the potential for further price erosion before any sign of recovery.
The second-largest cryptocurrency by market capitalization has faced tumultuous weeks, with its price bouncing off the $1,626 support level, giving bulls a glimmer of hope.
In a bid to regain lost ground, Ethereum needs to engineer a bullish breakout from the overhead trendline, aiming to potentially push its price back up to $2,020.
ETH Bullish Breakout Looms, But Challenges Persist
Over the past few weeks, Ethereum has witnessed multiple rebounds from the support trendline, thwarting sellers’ attempts to instigate a significant correction. The current ETH price hovers around $1,629, showing modest 24-hour gains of 0.5% but a seven-day dip of 4.9%.
According to recent price analysis, if buyers maintain their pressure and the support trendline remains resilient, Ethereum could witness a 5-6% surge. Such a surge could challenge the persistent descending trendline that has dominated the ongoing corrective phase, and breaking past this resistance is crucial for a more pronounced recovery.
ETH market cap currently at $195 billion. Chart: TradingView.com
Ethereum’s Dwindling On-Chain Activity Raises Concerns
While Ethereum’s price struggles, there has been a noticeable decline in transaction volume and overall activity on the Ethereum blockchain. Recent data shows that transaction volume has hit a nine-month low, accompanied by daily transaction fees reaching an eight-month low.
This trend has sparked concerns within the crypto community, with a growing consensus that users are losing interest in the Ethereum blockchain and possibly exploring alternatives.
Around mid-April, there was a significant shift in investor sentiment towards Ethereum, which was then trading at approximately $2,140 and had experienced substantial gains for the year.
During the following four months, there was a consistent trend of large-scale selling by Ethereum “whales,” individuals holding between 10 and 10,000 ETH in their crypto wallets. These whales are often regarded as informed and influential players in the cryptocurrency market.
One notable development that has raised eyebrows is the actions of Ethereum co-founder Vitalik Buterin. Observers have noted that Buterin has been transferring substantial amounts of Ethereum from his public wallets to other cryptocurrency wallets over the past month.
Source: The Motley Fool
The approximate sum of $6 million worth of Ethereum being moved has led some to view this as a potential red flag. Comparable to corporate insiders selling their shares when anticipating a price decline, Buterin’s actions have added to the uncertainty surrounding Ethereum’s future trajectory.
With investors cautiously optimistic about a potential price rally, Ethereum must overcome significant challenges, including breaking past key resistance levels and reigniting user interest in its blockchain. All eyes remain on Ethereum’s next moves, as well as Buterin’s, along with crypto enthusiasts bracing for what the future holds for this influential digital asset.
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