Ethereum [ETH], the cryptocurrency holding the second position in terms of market capitalization, has been experiencing a persistent downtrend since August, which has now extended into September.
Currently, as of the latest update, ETH is being traded at $2,338, showing a decrease of 1.3% over the last 24 hours and a 2% drop during the past week.
The cryptocurrency has not witnessed any substantial upward movement since the beginning of the month, causing concern among investors regarding its short-term direction.
A Challenging Path Ahead
An influential crypto analyst known as Dean Crypto Trades recently shared his perspective on Ethereum, suggesting that the downward trend might continue for some time. Posting on X, the analyst stated,
“ETH has experienced a strong rebound from support levels so far. Nevertheless, I anticipate that the market will remain volatile while the price remains within the $2,100-$2,850 range.”
He underscored the critical resistance level for Ethereum at $2,850, saying,
“The bulls are aware of the necessary steps to initiate a positive movement, but the journey ahead is likely to be lengthy.”
This indicates that even though a potential recovery might be in sight, it could take a considerable amount of time before Ethereum breaks out of its present trading range and regains a bullish momentum.
Examining Ethereum’s Essential Aspects
Despite the prevailing bearish sentiment surrounding Ethereum’s price performance, certain fundamental indicators offer a ray of hope for a potential turnaround. One significant aspect to consider is the level of retail interest in the Ethereum network.
Data from Glassnode reveals that Ethereum’s active addresses reached a peak of over 589,000 on August 14th but subsequently witnessed a notable decline, plummeting to as low as 377,000 by the close of August.
Nonetheless, starting from the beginning of September, there has been a gradual rise in active addresses, now surpassing 438,000.
This uptick in active addresses might indicate a revived interest from retail investors, potentially providing support to the cryptocurrency’s valuation in the upcoming weeks.
An increase in active addresses often aligns with escalated network engagement, which can stimulate demand for ETH and uphold price levels.
Another critical metric worth assessing is Ethereum’s exchange supply ratio, which gauges the proportion of the total ETH supply stored on exchanges.
As per CryptoQuant, this ratio is presently recorded at 0.141 today.
A lower exchange supply ratio generally implies that investors are transferring their assets away from exchanges and into cold storage, indicating their reduced inclination to sell in the short run.
This could alleviate the selling pressure on Ethereum, fostering more price stability. However, it is imperative to closely monitor this metric as any noteworthy shift could signify a change in market sentiment.