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As Ethereum rebounded above the $3,200 mark this weekend, the network experienced a significant surge in activity, recording its highest single-day growth in nearly 19 months. On May 4, 2024, an impressive 196,000 new Ethereum addresses were created, marking the largest daily increase since Oct. 8, 2022. This spike in network growth is a bullish signal, suggesting a strong and increasing interest in Ethereum.
Despite a current price drop below the $3,200 level, the strength of the Ethereum network is still there. The creation of such a large number of new addresses indicates an influx of new participants or renewed interest from existing ones, which can provide a solid foundation for future price growth.
From a technical analysis perspective, Ethereum is facing an important level. The cryptocurrency is on the edge of falling below the 200-day Exponential Moving Average. A break below this level could suggest a potential bearish outlook in the short term.
However, the descending trading volume accompanying this price decline might be indicating a potential reversal. Typically, a decrease in volume during a downtrend can suggest that selling pressure is exhausting, setting the stage for a possible bullish reversal if other conditions align favorably.
The combination of strong network growth and the TA indicators present a mixed scenario for Ethereum. While the price is currently experiencing some bearish pressures, the surge in new addresses and the characteristics of the volume suggest that there might be latent bullish potential waiting to manifest.
Any sustained movements above the 200-day EMA or signs of increasing volume could confirm a reversal from current levels.