- The number of addresses on the network has decreased over the last 7 days.
- The supply of ETH on exchanges has decreased, reducing the possibility of selling.
While the Spot Ethereum (ETH) ETF is set to begin trading actively in the coming days, activity on the blockchain network has been disappointing, AMBCrypto found out after assessing the project’s network activity.
At the time of writing, we have seen a decrease in active, new, and zero balance addresses on Ethereum. By definition, a new address is a unique user who makes a successful transaction for the first time on the network.
Activity is down, but there are problems
This metric serves as a measure of traction or adoption. Active addresses, on the other hand, tracks the number of users participating in transactions. A higher metric indicates higher levels of user engagement and growth.
However, at the time of writing this article, active addresses have decreased by 15.45% over the past 7 days. New addresses have not been spared either, with a decrease of 6.50%.
Source: IntoTheBlock
This development is surprising considering how close the expected ETF launch is. If this downward trend continues, the ETH price could be affected, as a decrease in Ethereum network activity could mean a decrease in demand for the cryptocurrency.
According to CoinMarketCap, at the time of writing, the price of ETH was $3,379, representing a 3.35% decrease in value over the past week.
Another metric that AMBCrypto looked at was the exchange supply ratio, which is the percentage of coins reserved on exchanges as a percentage of the total ETH supply.
An increase means that the number of coins on exchanges is increasing. A potential consequence of this is that selling pressure is increasing, which could later lead to a price decline.
However, according to data from CryptoQuant, the rate appeared to be falling at the time of writing. This decline lowers the risk of selling, as holders appear to be comfortable locking up their assets for safekeeping.
Source: CryptoQuant
ETH traders are not confident
As funds move away from exchanges, the potential for strength increases. However, for this to have a positive impact on ETH, buying pressure would need to increase.
If this is true, the price of ETH could rise to $3,600 in the first few days of July. However, if the opposite happens, the value could consolidate between $3,200 and $3,400.
Additionally, Ethereum’s open interest has fallen from its value on June 27. The abbreviation OI refers to the value of open positions in the derivatives market.
An increase in this indicator means that traders are engaging in a lot of speculative activity. Conversely, when this indicator decreases, it means traders are liquidating existing positions and taking money out of the market.
The OI of ETH, worth $13.14 billion, suggests that participants are not holding back on opening positions to take advantage of price movements.
Source: Glassnode
Read our Ethereum (ETH) Price Prediction 2024-2025
If the value continues to fall, the price of ETH may also trend downward. However, this prediction could be invalidated if open contracts increase and buying pressure from the spot market follows.
If this is true, ETH could see an uptrend towards $4,000.