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Ethereum, the second-largest crypto asset by market capitalization, has shown mixed signals in the first half of January 2022. The ETH price has mainly been range-bound between $3,100 and $3,300 since the turn of the year, frustrating most investors who thrive on market volatility.
ETH Price Drops Back Below $3,200
The top bitcoin rival extended its decline below crucial support on Tuesday and traded as low as $3,129 before correcting slightly higher.
ETH/USD is currently down 3.5% to change hands just above the $3,100 mark, per data from leading crypto tracking website Coinmarketcap. The dip has led to massive FUD as some market participants offload their assets amid the rising fear that the $3k support may not hold.
Nevertheless, in-depth analysis from Santiment, a market data platform for crypto assets, reveals that social volume is spiking, indicating that more people are talking about the ETH price action and prospects.
The uptick in interest amid dropping prices could indicate that crypto investors are becoming more optimistic that an ETH rebound is near.
Ethereum Social Dominance is Gaining Steam
Despite the lackluster price action in recent weeks, Santiment data shows that social dominance for Ether is on an upward trajectory. Essentially, discussions related to ETH versus the other coins in the top crypto 100 rankings haven’t been this high since early September of 2021, right before the altcoin soared to a new all-time high.
The increasing social engagement for Ether during a downturn could point to a short turnaround in the coming days. That is because some investors are likely to panic-sell at a loss to the opportunists waiting to scoop up tokens and drive up the price.
The analysts are also examining the circulation metric, a reliable tool that could help shed light on what will happen next in the ETH market. Santiment data shows that the daily circulation of unique coins on the network is declining, indicating that utility for Ethererum could be dwindling.
The low circulating supply for the second-largest crypto indicates that the amount of utility for ETH may not be high enough to justify a price pump in the near term.
Coinbase Exec Predicts Major Advances for Ethereum Scalability
Ethereum has been plagued with low transaction speeds and major scalability issues over the past year, prompting developers to roll out layer-two solutions.
According to a recent post from Surojit Chatterjee, the Chief Product Officer at Coinbase exchange, crypto users can look forward to significant advances for scalability on Ethereum in 2022.
The CPO expressed his confidence in the second-largest blockchain, reiterating that continued efforts to boost scalability could push the smart contracts network ahead in the crypto economy and emerging Web 3.0.