Another mining crackdown in China has yet again affected the prices of cryptocurrencies. The largest altcoin,
Ethereum has remained in a bearish zone since the weekend, similar to bitcoin. The token has traded below the $2000 support levels has now lost more than half of its value compared to when it peaked at over $4300 in May.
Even though the coin shows signs of recovering past $1900, the recovery is not very strong because a pullback is being recorded at most trading periods. At its current level, there are strong signs of a push to $1950, majorly influenced by investors who want to buy at the current levels.
The major resistance that ETH has to overcome after reaching $1950 is $2065. If the altcoin manages to push past level, we may see a slight bullish momentum.
On the downside, further retracement from the current price may trigger a sell-off, especially if ETH goes below $1850. In this case, holders may experience more losses, and the token may even go below $1800 and stop at around $1720. With the current pressure in the market, a retracement to that price may be inevitable.
Nevertheless, reaching $1700 may signal an advantageous entry position for new investors, hopeful that the prices may go up again.
Ethereum’s network has always acted as a basis for which its native token derives its value. The network dominance in decentralized finance protocols had even led to reports that the token may be a better store of value than Bitcoin. However, the network is currently under siege, following more scalable and faster networks such as Polygon and Solana that investors prefer to Ethereum.
The transaction fee revenue on the Ethereum network has significantly dropped ever since the congestion reduced. More than a month ago, the transaction fee revenue was 15,000 ETH, but this has declined by 85% to the current 1900 ETH. However, whether this factor will influence more DeFi developers to join the platform as they await the proposed layer two upgrade remains to be seen.
Glassnode on-chain metrics also show that the number of on-chain active addresses for Ethereum has dropped by 30% to reach 474,000 from the peak of 676,000 a day. These metrics also indicate that long-term holders are increasing their hold while short-term holders are staring at losses.
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