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Ethereum price is trading at $2,700 on Aug 23, falling behind the likes of XRP and AVAX in terms of monthly time frame performance, 3 technical indicators offer insights into why ETH price, having struggled to maintain upward momentum over the past month.
Ethereum Price Falls Behind XRP, AVAX
The global crypto markets continue to find buyers and attract institutional demand despite uncertainty in the global macroeconomic landscape. While the likes of Toncoin and Litecoin have been buoyed by news of Russia Legalizing crypto, Solana and XRP have been lifted by bullish news events from Brazil and US authorities.
But oddly, despite over $10 billion capital inflows from the newly-launched Ethereum ETFs, ETH price has continued to struggle to maintain upward traction over the past month.
Looking at the chart above, we see that Ethereum’s price has failed to advance above the $2,780 mark despite multiple attempts since Aug 14. At the time of writing on Aug 23, ETH is trading at $2,660, down 6% from the aforementioned 14-day peak.
While the price of Ethereum has struggled, the rest of the altcoin market continues to attract demand. As depicted above, the TOTAL3 chart, which captures the total valuation of all cryptocurrency assets, excluding Bitcoin, shows an impressive 5.8% uptick during the same period.
Ethereum Network Usage Dips 35%
Currently, Ethereum represents 15.07% of the global crypto market. When such an important asset falls behind the broader market trend, it suggests the presence of internal bearish signals.
Looking towards the underlying on-chain data, there has been a significant decline in user activity on the Ethereum network over the past month. IntoTheBlock’s Active Addresses chart above shows the number of unique wallet addresses that conduct a valid transaction on the Ethereum blockchain network.
Looking at the chart above, we see that Ethereum attracted 487,770 active addresses when prices raced to the local peak of $2,777 on Aug 14. But since then, things have taken a significant downturn.
At the time of writing, the latest on-chain data shows that Ethereum attracted only 317,305 active addresses on Aug 22, reflecting a 35% decline in network demand.
This decline in active addresses can be bearish for Ethereum in a couple of key ways. First, it suggests a decrease in network utility and demand. With fewer users engaging in transactions, deploying smart contracts, or interacting with decentralized applications (dApps), the overall demand for Ether diminishes.
As demand weakens, so too does the price, as fewer users are willing to buy Ether for on-chain activities. This reduced demand often exerts downward pressure on prices, contributing to a bearish outlook for Ethereum.
ETH Price Forecast: More Consolidation Before $2,800 Breakout
Based on current on-chain indicators and market conditions, Ethereum’s price struggles over the past two weeks are closely linked to the decline in network activity. Although the broader crypto market sentiment remains cautious, Ethereum bulls are showing notable resilience to hold the $2,600 support.
This persistence could help Ethereum maintain relatively high support levels and potentially spark a significant breakout in the next phase.
If Ethereum’s price manages to hold above the $2,600 support level, the bullish sentiment could strengthen, leading to a potential rally. A successful breakout above $2,800 could confirm the short-term bullish breakout, with the $3,000 level standing as a long-term target.
On the downside, the Bollinger band technical indicator highlights a key support level at $2,412, where bulls are likely to mount a strong defense. A breach below this level could invalidate the bullish outlook, but a robust rebound could rekindle buying interest, propelling the price toward the $2,500 mark.